Mature Life Features

. . . that the reason

people give out free advice

so easily is

because they aren’t using it.

= = = = =

Be a Good Scout at Tax Time

Be prepared. This maxim emblazoned in Boy Scout lore also applies to the thorny annual chore known as “doing my taxes.” A simple system of keeping receipts and monthly statements can save you a lot of aspirin at filing time. It can also cut down on your cost of tax preparation since the less time your tax preparer has to spend on your return, the lower the bill.

Three basic items will help establish a workable record-keeping system:

—  your checkbook register,

—  a clutch of file folders for financial statements and receipts, and

—  a workbook to log any deductible expenses, such as mileage to and from medical appointments. Your tax preparer can advise you on how to make this basic program work best for you. They might suggest that you update your files monthly.

It’s always wise to call your tax accountant early because the rules keep changing. By starting early, you’ll be aware of what you’ll need to wrap up your current year’s tax filing.

Remember that banks, bosses, and brokerage houses — almost anyone paying you an income of any sort — report these transactions to the Internal Revenue Service. The agency gets all these notices and its computers try to match up the information from these sources with the information you prepare and file.

Besides staying ahead of the game by being prepared, keep in mind that the IRS makes mistakes. It’s easy to foul up a Social Security number, for example, and you might get an IRS notice based on garbled data. One tax preparer recounts often an incident in which a bank’s report to the IRS of a customer’s mortgage interest payment was read as interest income. The taxpayer was then notified by the IRS of a disparity in tax owed to the government because of this “additional income.”