Special MONEYWATCH Edition

What are some easy steps taxpayers can take to
lower their taxes in 1999?

  • Have several children so you can take Child Tax Credits
  • Send them all to college so you can take Hope Scholarship or Lifetime Learning Credits
  • Start paying off their college loans so you can try to deduct the interest expense
  • Drive at least 50,000 miles for charity, resulting in an itemized deduction of $7,000 at the new, generous rate of 14¢ per mile
  • Have your boss take away your desk and tell you to start doing all your paperwork from home, so you can try to qualify for the home office expense deduction
  • Contribute $2,000 to a Roth IRA'Actually this won't lower your taxes this year, but someday you'll be happy you put the money away.
  • And my final piece of advice for those of you who
    want to slash your taxes in '99 is to take a job with lower pay'Believe me,
    you'll be amazed at how much lower your tax bite will be.

What do you think of proposals that have been
made to replace our current income tax structure with a flat tax or national
sales tax?

What? Replace our current income tax? Take away the tax which provides as much variety and fairness in rate structures as the airline companies that offer 10 different rates for the same ticket on the same flight? Remove a system that encourages entrepreneurship by offering our self-employed citizens tax rates that are nearly a third higher than that of their employed counterparts? Do away with complicated tax forms with instructions that the average person can't decipher, requiring taxpayers to pay professional tax preparers to fill out their tax return? Gee'Do you think the taxpayers of the nation would really go for it?

What are some records that people often don't
keep but should?

The White Album, The Who, 'Live at Leeds'; Chicago Transit Authority; It's a Beautiful Day& If you no longer have any of these treasures, I'd suggest dredging up old tax returns'You can ask the IRS (at 1-800-TAX-FORM) to send you copies of old tax returns if your copies have gone the way of your favorite albums'It's always refreshing to look back at tax returns of the past and think about how much more money you're making now, and how much less of it you seem to have to spend'On a (slightly) more serious note, hang on to purchase records of anything you acquire that you think might be
valuable some day.

What are some sources on the Internet that can
help people with their taxes?

The IRS'web site http://www.irs.ustreas.gov/prod/cover.html
provides downloadable forms 'a great place to visit as your tax deadline
approaches and you realize you don't have that Schedule D you need to complete
your return'Likewise, the Indiana Department of Revenue Home Page http://www.ai.org/dor/ has Indiana state
tax forms available for downloading'The Roth IRA Web Site Home Page http://www.rothira.com/  will tell you more than you ever wanted to know about this new type of IRA.

How can you protect yourself against an IRS audit?

You could try filing tax returns in another country, but I've heard the arms of the IRS are pretty far-reaching, so international borders may no longer save you'Seriously, you can protect yourself (somewhat) by not making up information for your tax return, or not forgetting to report all of your income'Sometimes, however, audits happen even when you've done everything right'Because of that fact, try to keep your stress level down if you're audited 'you might even come home with an extra refund instead of a higher tax bill!

You may like these other stories...

Ernst & Young 2013 audit deficiency rate 49%, regulators sayMichael Rapoport of the Wall Street Journal reported on Thursday that the Public Company Accounting Oversight Board (PCAOB) found deficiencies in 28 of the...
Some of your clients may get away to business conventions from time to time. It gives them a chance to rub shoulders with colleagues, catch up on the latest developments, and fine-tune their skills. And, when the meetings or...
PwC must face $1 billion lawsuit over MF Global adviceA federal judge on Wednesday ordered PricewaterhouseCoopers (PwC) to face a $1 billion lawsuit claiming that its bad accounting advice was a substantial cause of the...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.