{"id":1060,"date":"2014-01-22T15:45:10","date_gmt":"2014-01-22T15:45:10","guid":{"rendered":"http:\/\/vhfinancialmanagement.com\/?p=1060"},"modified":"2014-01-22T15:45:10","modified_gmt":"2014-01-22T15:45:10","slug":"gearing-up","status":"publish","type":"post","link":"https:\/\/vhfinancialmanagement.com\/2014\/01\/22\/gearing-up","title":{"rendered":"Gearing up!"},"content":{"rendered":"
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As we start the new year, we begin with aspirations of success and happiness for the year. But, as we move a couple weeks into January, we realize we are knocking on the door to a very busy time of the year: Tax Time!<\/p>\n

After preparing taxes for years, I am used to the unexpected\u2026.if that\u2019s possible.\u00a0 I\u2019ve seen the shoe box full of receipts. I\u2019ve seen letters from the IRS. I\u2019ve heard all of the stories.<\/p>\n

As a fee-only financial advisor, I am always telling my clients I don\u2019t sell anything\u2026..or at least I don\u2019t sell anything but SLEEP! Taxes seem to be an issue that can keep us all up at night, especially if there is uncertainty, and uncertainty comes from two places: lack of solid substantiation or lack of understanding.<\/p>\n

Remember the IRS always has the right to question a deduction, stance, or position, but the IRS will not decline a deduction that is within the rights and laws of the taxpayer\u2026especially when appropriate substantiation is present. \u00a0When we have the appropriate paperwork to back up a position, there is no need to lose any sleep or worry.\u00a0 Sure, the IRS can ask, but the proof is in the pudding\u2026well, in the receipt.\u00a0 So, no need to worry.<\/p>\n

The best medicine for a good night\u2019s sleep is to prepare prudently: keep good records (which you all have heard me opine about), stay organized, and stay efficient.<\/p>\n

What can we do to make our tax preparation experience smooth?<\/p>\n

While 2013 is in the rear view mirror, there are things we can do to prepare for the 2013 tax season.\u00a0 Keep your tax documents organized.\u00a0 When you receive your w-2, 1099, 1098\u2026etc, don\u2019t lose it or spill coffee on it. Set them aside in a folder clearly marked 2013 tax documents. \u00a0You can also be proactive and get some documents early, such as 1098 (mortgage interest statements), and 1099 composite forms (interest, dividend, and capital gain documents from brokerage accounts).\u00a0 These forms are often available online before you receive them in the mail.<\/p>\n

For business owners and rental property owners, it\u2019s important to have the right documentation available.\u00a0 This is old hat for many of you, but for those with new businesses, it\u2019s important to create a document that clearly outlines income and expenses. Software packages, such as Quickbooks, do a great job of this by creating the appropriate reports\u2026..usually a Tax Detail report or a Profit-Loss Detail report for the tax year is perfect.<\/p>\n

It\u2019s just January\u2026..why all the fuss? April 15th<\/sup> is our deadline!\u00a0 Sure, we can file for an extension, and sometimes due to circumstances beyond our control we may have to, but we must remember that taxes are an integral part of personal financial planning.\u00a0 If we push 2013 too far into 2014, we lose the ability to be proactive and plan efficiently for our future, so, the time to start is now.<\/p>\n

If you want to help yourself, get your taxes done on time or early.\u00a0 You will be amazed at the feeling of accomplishment you will realize.\u00a0 Plus, you will have a better opportunity to plan for a prosperous 2014!<\/p>\n

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