When it comes to preparing your taxes, even do-it-yourself types are willing to leave it to the experts—especially after seeing the 1,000 pages that comprise U.S. Master Tax Guide.
That’s why Coconut Creek Lifestyle spoke to three of the partners at Bergman, Hirsch, Spilfogel & Tyman—Garry S. Bergman, Jerrold Hirsch and Steven Tyman, who bring a combined 100 years of experience—for advice heading into tax day, April 18.
Back it up: Many people are audited because they don’t keep records of business expenses—even those who aren’t self-employed. Except for driving to work, other business expenses such as meals and automobile use are deductible. “They need to keep some type of document of every material item that’s listed on your tax returns,” Bergman says. “If they claim a deduction for entertainment expenses, they need to have documentation as to the business purpose: who you met with, where, if it was paid in cash, date, time and what you discussed.”
For better or worse: There are good reasons for married couples to file separately. For example, one spouse might have a tax problem. Usually, however, it’s best to file jointly as Tyman says there is a higher potential of losing out on credits and deductions with separate filing.
Think ahead: Planning to invest in the future, such as buying a home, can affect how you do your taxes now. “Sometimes, it might even pay for you not to take some expenses as a deduction just to leave your income high enough for you to qualify for the mortgage you’re looking for,” Hirsch says.
Work together: Family taxes can get more complicated for college-aged adults who still live at home yet have taxable income. In general, they can be claimed as dependents if a parent provides “more than half their support” including food and utilities. But variables such as age and wage-earning limitations can change this. Commonly, Hirsch says, problems arise with “changes that grown adult dependents [make] without informing their parents when they still qualify for the dependency deduction. And the parents are the last to know.”
Get help: Though some people rely on tax preparation chain companies, independent firms offer personal attention. “They just learn how to use the program, not knowing what questions to ask,” Tyman says. Doing it yourself might not fare well, either, if you don’t have the necessary knowledge. “You need to understand that you don’t know what you don’t know,” Hirsch says. Plus, he says, you can claim the tax preparer’s fee as a deduction.
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Bergman, Hirsch, Spilfogel & Tyman, CPAs
4171 W. Hillsboro Blvd., Suite 9, Coconut Creek 954.354.1660; taxsaver.cc