Tax Deductions – It’s up to you

Every so often I get phone calls or emails (usually around the time I am preparing a tax return) stating that “I need as many write-offs as possible”.  Understandable, but WRONG.  Tax deductions do not change.  The personal tax return has not changed significantly in over a decade (10 years for you youngsters out there).  I would also like to say that I can’t just make stuff up or manufacture deductions.

Deductions come from you.  I can ask questions, but you have to tell me if you have moved, changed your marital status, had another child, started a business, how much you spent in medical expenses, donated to charity, etc. 

If you have a business it is up to you to tell me how much you spent on business related items.  You need to have receipts and proof to support your business deductions.  I will tell you if those things are deductible for tax purposes and make sure that they get reported properly.  If you are really not sure about deductions, make an appointment and come see me during the year so we can discuss your situation, talk about specifics, and come up with a plan.  I can even suggest things that you should be aware of so that you don’t miss any deductions.  That said you have to put out the effort to spend the time and ask the questions prior to the end of the year. 

There are ways to save on taxes by income splitting, and tax deferral, but these do not work for everyone.  These strategies only work for business owners where one spouse is not working.  These strategies will save you a few hundred or if you are lucky a few thousand dollars of tax.  They will not miraculously make your $10,000 tax bill disappear.  NOTHING CAN DO THAT!!

I don’t want you regular readers out there to think less of me (I am awesome at what I do), but even I have my limits.  If you want miracles then it is time to start praying and looking to a higher power.  There is no mythical cure all for taxes.  There are no secret deductions, special chants, or mythical witchcraft-accounting-tax-secrets.

If you have found yourself in this situation I highly recommend that you read my other blogs on budgeting, tax deductions, and how tax works.

 Most people don’t have tax problems.  They have spending problems.