Tax Tips A Happy Fix

Feel good about a year well spent; preparing your taxes should give you a sense of pride, not drudgery.

It’s a little known fact that I secretly love doing taxes. I wrote a whole paragraph about why, but I realize you've got laundry to do etcetera so I'll paraphrase. It’s like a judgment day to see what a year’s worth of effort yielded.

The more creative your career or work life is, the more complex your taxes.

It is that time of year when you look outside and are thankful there is still snow because it means you’re not too late to gather up your W-2s and 1099’s, start the schedule C if you’re self employed, and think hmmmm, I wonder if I could still recreate a mileage log and claim a home office in the bottom of the pool for last year?

The first decision or rite of passage for many families is whether to do their own taxes, or use a service. 

We settled that debate in our house years ago, and I’ll never do it any other way. Because I tend to have enough W-2s and 1099 income statements (some with my correct name, even) to paper a bathroom, three schedule C's and graduate school bills, childcare, home ownership and that private jet we hide in our garage (you were wondering why we never park our cars in there — don't lie — I've seen you staring up our driveway) there really is no way to guarantee we’re getting the right deductions unless we use a tax service that is well-versed in this kind of blend.

On the other hand, I personally have met and know competent, happy, Turbo Taxers who have two adults and two corresponding W-2s with no complications. They have their lives in a spreadsheet all year, and can identify charitable donations for the long form if they go over $500. Perfect! They are not up at night deriving the right formula for how to divvy up their iDeductions from iDevices they use for home/work. I envy them!

Allen Salzstein in Shorewood says that using a service (like him) is beneficial for three big reasons:

  • Making sure you get all of your deductions. "There may be changes this year you may not even know about."
  • Having another set of eyes to check your math.
  • The biggest one, he said, is possibly saving your marriage. “People thank me all the time for that,” he says. “Seriously.”

Another benefit I find is that you send a somewhat organized jumble, and get back a very tidy copy of your taxes, and you have a back office that also has a copy. There is also representation in case of an audit.

If you do your own taxes, Salzstein and online advice sources will tell you two things: “Double check your math, and be sure to use the correct entries from reporting forms.”

Salzstein's pet peeve is folks who wait for April 17 (the deadline this year) to frantically drive down to the central post office to join the chaos around midnight to get the date stamp. A lot of times, extra postage is required, make sure you have enough on your taxes. (I actually remember my dad driving down there in his bathrobe and hearing, yes, exciting tales of flares and flashing lights and mayhem, so it’s all in how you like your adrenaline, I guess).

Enough fun — here is the nitty gritty

Even if you use a service, you have to prepare your taxes. Salzstein reports some areas of research for everybody to pay attention to this year: Sales tax, energy credit, and charitable contributions.

1. Sales Tax: Don't check the box for no.

Here’s a fun one. (Yes, I’m being facetious). You know how psyched you were to save the sales tax on those shoes from Zappos.com, this year? Think again. The IRS has a box for you to check (don’t check it if you are reading this and made any online purchases this year) and a blank line for you to calculate the sales tax (state and local) you actually still owe on those purchases.

Is this new? No. Is it new that if you check the box stating you owe no tax, your return will go in the audit pile? Yes. That is the rumor amongst CPAs this year.  Don’t check the box, don’t leave it blank. You don’t have to include receipts with your taxes, so picking a number that seems rational is a good idea without spending a ton of time going back over a year’s worth of online receipts or credit card detail.

2. Energy credit: if you plan to take this, the IRS is looking for you to list how much you received in the past, since 2006 and every year to the present.

3. Charitable contributions: The limit is $500 for little information about your donations. However, you can donate to up to 50 percent of your adjusted gross Income so maybe you did donate more than $500 in money, in kind or stuff to goodwill. If you made $50,000, for example, you could potentially deduct up to $25,000 in charitable donations. If those donations are clothing, for example, you must itemize such detail as where you purchased the item and when and for how much, how much you valued it for donation, and how you arrived at that number. Generally, according to another accountant I spoke with at a major firm in Milwaukee, items should always be valued at less than 20 percent of purchase price. Is this amount of time you will take recreating the data if you haven’t kept track of receipts worth the tax savings? That is hard to tell.

Have fun, and here in Shorewood there are resources for you:


The Senior Center in Shorewood is offering free tax preparation assistance on Thursday afternoons by appointment now through April 12. Call the Senior Resource Center for an appointment at 414-847-2727, as slots are booking up. There is no age requirement to receive help, but they do not handle foreclosures, recent divorces or any rental/business taxes.

The Shorewood Public Library has tax forms, even if you plan to file online it's nice to have a working draft. Find the library at 3920 N Murray Avenue, or call at (414) 847-2670.

All tax forms are available online as well as instructions for those forms. IRS Federal tax forms and Wisconisn state forms are available for download.

Have fun, sharpen your pencils, brew up a pot of coffee, open up your online calculator, and use this beautiful day to tally up a year’s worth of activities! Be happy they approved the 2 percent FICA withholding — that's more money you get to keep in the next two years.

Will Rose February 26, 2012 at 03:18 AM
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Jenny Heyden February 26, 2012 at 01:04 PM
I think my story just got spammed. or Maybe Will isn't writing a free ad here?


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