Friday, January 26, 2007
For What It's Worth: Tax
'Tis the season very few look forward to -- tax season. But with tax time looming once again, who is going to do your taxes this year? As 7's Craig Stevens shows us For What It's Worth, make sure you choose your tax preparer carefully.
WSVN -- Mike Valdes works very hard for his money. He's building his own business, buying and selling properties.
New businesses rarely make a profit, so Mike was thrilled when his tax specialist told him he was getting a refund of $500.
Until the IRS told him something else.
Mike Valdes: "I got a letter from the IRS saying that I owed them money, that I have to send back $1500."
Mike's tax return was wrong.
That's why 7 News Financial Expert Ken Wurtenberg says you should be very selective when hiring someone to do your taxes.
Ken Wurtenberg: "A preparer can be someone who just files a form, or it can be a financial advisor who gives you financial and business advice along with tax preparation."
But how do you choose who is right for you?
If you have one W-2 form, you can do it yourself.
Ken Wurtenberg: "Today you can go to the IRS.gov web site and even use free software, do it on-line electronically, get your refund in 7-10 days."
If getting your taxes done quickly is most important to you, head to a nationwide tax franchise.
But be sure to ask your preparer about their tax training.
Ken Wurtenberg: "They do have trained individuals, but they're not trained in a lot of financial matters where you have complex situations. "
Complex tax situations, or if you need financial guidance, should be handled by a certified public accountant.
Ken Wurtenberg: "The professional should tell you what you're doing right financially and wrong financially and tell you what the black, the white and the gray areas of what the tax law are."
Ken says there are red flags to look for -- tax preparers who promise you a large refund and those who base their fee on the amount of your refund.
Mike learned the hard way.
Now he consults a CPA he trusts and has a tax plan that's working for him.
Ken Wurtenberg: "My hope is like everyone's -- roll in the money. That's my hope."
Craig Stevens: "Ken says you should review your return before you sign it. Keep your tax records for no less than three years."
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