West Points

Friday, March 18, 2011

"Your accountant is only as good as the information YOU give them."

By Heather Gurewitz
Mendocino Women's Business Center Director

Let's face it, taxes don't exactly whip people into a frenzy of excitement, but, bringing Keith Hall virtually into our conference room last month to share his wealth of knowledge is one of the most important things we can offer. While you need your accountant to help you with all that tricky depreciation stuff, and figuring out those home office deductions, there is one simple truth you should always remember at tax time:

"Your accountant is only as good as the information YOU give them."

I will emphasize some of the key points I got from TaxTalk:

1. Do The Paperwork - I know, it isn't fun, but hey, if you think about all those deductions you can take, you can save a lot of money. But if you don't have the documentation you could end up owing more in the end (don't forget penalties). If you are guesstimating that you drove 6,000 miles in your personal vehicle for the year, you had better have something to prove it to an auditor. Your accountant won't make a mileage log for you, you have to do it.

2. Red Flags - Lately I have had clients coming in saying they are hesitant to take a deduction because they heard it was "red-flagged" by the IRS. Yes, there are some things that are red flagged by the IRS, and you don't want the IRS to accuse you of FRAUD, which is why you only claim what is legitimate and what you can document. The long story short being, yes, you should be careful with deductions, and if you have a legitimate deduction, see #1 above.

3. It Doesn't Matter If You Have an Accountant - Okay, it does MATTER if you have an accountant, but not in regards to how you organize your finances. You are not the only person who walks into your accountant's office on April 1st with a box of receipts or a book full of penciled in numbers and a sheepish grin. Well, okay, maybe you went in February 1st, but still, your accountant is now sitting at their desk with piles of receipts, books, and a looming deadline for them all. You are essentially telling them to set your financial management system for the last year and expecting them to know how you operate and manage your business. If something goes wrong, you are responsible. In fact, you will have to pay your accountant again if you want them to help you through an audit, and if you don't have the proper paperwork, it won't do any good.
So, do you have that sinking feeling in your stomach, like, maybe you should have gone to TaxTalk? Well, have no fear, by popular demand, we are bringing Keith back on Wednesday, March 30th from 10am-12pm to both Ukiah and Fort Bragg. This is not a class on how to fill out a Schedule C (we give you a book that tells you how to do that and the IRS provides a  virtual workshop and information resources on filing). This is a class on how you can save money and protect your personal and business assets. Try our new easy on-line registration system, and save your space now!

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