Most people don't want have the inclination or time to learn everything about filing their taxes like Frugal Babe (although I am the same and want to do it myself, too) and feel more comfortable trusting a “professional”. However, even if you have someone else do your taxes, it is important to take a few minutes and make sure everything is correct. Miranda from Financial Highway has Top 10 Common Filing Mistakes which you can use as a guide to double check your tax return and make sure everything is good to go.
In 2007, for the first time ever, I had a tax professional do our taxes. It was because Mr. A had started a side business that year and I wasn't sure how to go about doing our tax return. Mr. A's mother and sister use the same accountant, so we decided to give him a try.
He finished up our taxes and sent them over for me to have a look at them, and I caught more than one mistake. Of course this made me even more wary of having someone else do our taxes.
This year, an acquaintance of mine who has used the same tax lady for the past twenty years called me all excited about her tax refund. She said she was getting back $4000. She said she never got that much back before, but she wasn't going to complain! I thought it was a little unusual, but thought maybe her circumstances had changed quite a bit. Since my friend is an accountant herself, I assumed she looked over the tax returns to make sure everything was correct. Unfortunately, as it turns out, her accountant had missed one of her 1099-MISC forms! Whoops!
Had my friend gone over her tax papers before she signed them, she would have avoided this problem. Instead she signed the papers and got them right in the mail. Well, the very next day her accountant called to let her know about the mistake. Uh-oh. Too late!
Now come to find out she owes $879.00. She's still waiting to see if the IRS will find the mistake or whether she'll get $4000 deposited into her account, only to have to return it.
Be sure to double check everything on your tax forms, whether you do them yourself, or trust a professional.
Are your 2009 taxes done?
Great point. We have historically used a CPA to do our taxes as well with DH being a foreign national going through the green card, then nationality process. DH was almost denied nationality due to a glitch in the way the CPA did his taxes way back when he first arrived in the States. We were very, very lucky our attorney caught the problem in time!
And we thought we were being ‘smart’ by getting help on our taxes when we felt we didn’t know what we were doing. The best way to go is to be as informed as possible and have someone double check your work . . .or as you say, at least double check your accountant’s work.
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Mrs. Accountability Reply:
March 15th, 2010 at 3:46 pm
Simple in France: Wow, I’m glad that problem was caught by your lawyer. I hope some people are encouraged to at least double check their returns.
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Simple in France: Wow, I’m glad that problem was caught by your lawyer. I hope some people are encouraged to at least double check their returns.
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Whoa, that is scary! I have my dad check mine. I can’t believe that happened to your friend!
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Mrs. Accountability Reply:
March 15th, 2010 at 3:47 pm
Hi Mrs. Money… hey, I just read over at Rainy Day Saver’s that her dad helps her with her taxes and she just got word from him that they’d made a mistake. Whoops.
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For me, the tax code is so incomprehensible that I could go over my forms and be darned…I still have no way of understanding what on earth any of it means. The only thing I noticed was that Tax Lawyer Extraordinaire failed to enter the previous year’s tax preparation bill among the deductions…but then I realized it was because I’d paid that out of a Vanguard money market fund and hadn’t included the check-writing on that fund in my Quicken printout. Argh!
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Mrs. Accountability Reply:
March 23rd, 2010 at 3:57 am
Hi Funny: But the mistake you caught is exactly what I was talking about. Most of us don’t know all the tax codes, etc. but with a calculator we can at least add up our W2 and 1099s, and look over and make sure everything was included. That one guy I used didn’t include an Arizona credit available to single or married people. Clean Elections Act I think it was. Only $5 or $10 but every dollar counts!
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Use IRS tax extension form 1127 if you are asking the IRS to postpone payment of the full amount of your tax debt. If you can pay the full amount in one chunk, just not by April 15, file this tax extension form.
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