Women of our World, OPRAH Shares – 2010 Tax Prep 101

 

 

A Celebration of Women

 

March 3, 2011
 

Tax Prep 101

 
Whether you have the information stored on your computer or in a shoebox, a new tax season can still leave you feeling unprepared.

Yield a better return this year and save tons of money with expert advice on your most-asked tax preparation questions.

 

 

•  Should you hire a professional to do your taxes?
   
•  Which records should you keep, and which ones should you ditch?
   
•  Hidden deductions, credits and strategies that add up
   
•  The 3 best ways to spend your tax refund

In this rough economy, Americans are trying to save every dollar they can. We spend upward of $11 billion each year on tax preparation. Six in 10 taxpayers hire someone to help them fill out the forms and calculate what they owe, while millions more rely on computer programs like TurboTax, H&R Block and TaxACT.

 

Is paying a tax professional throwing your money away?

 

Not necessarily. I’m a huge believer in having your taxes done professionally—especially if your income exceeds $50,000 a year. In my experience, the savings you realize from a professionally done return will more than cover their fee. In fact, the savings are usually somewhere between five and 10 times your investment. So if you spend $500 having your tax return done, you will more than likely shave $2,500 to $5,000 off your tax bill. The investment return is relatively high. Plus, you can write off the expense! Most people come out ahead when they hire someone to do their taxes professionally.

 

Hire a professional if:

• You earn more than $57,000 a year
• You are self-employed
• You bought or sold a home recently
• You trade frequently
• You own multiple properties

 

The single biggest mistake people make is not itemizing their deductions.

The government estimates that the average American leaves $400 to 500 on the table by not itemizing.

 

Records to keep all year:

• Healthcare expenses
• Interest on mortgage payments
• Business expenses
• Home improvements
• Record of all investment trades
• Charitable donations

 

Each month, David Bach will be offering a free download of a new chapter of his book Start Over, Finish Rich. Each chapter offers step-by-step instruction on topics designed to help you get your finances in order in 2010:

• Get out of debt
• Fix your credit
• Rebuild your 401(k) plan
• Take SMART risks
• Make your financial recovery automatic
• Rebuild with real estate
• And more!

Download “Step 1: Recommit to Wealth”

Download “Step 2: Find Your Money”

Download “Step 3: Deal with Your Credit Card Debt”

Download “Step 4: Fix and Protect Your Credit Score”

Download “Step 5: Rebuild Your Emergency Savings”
 
NEW! Download “Step 6: Re-energize Your Retirement Plan”

 

Instructions
 

If you’re on a PC, right-click on the link above. Internet Explorer users, select “Save target as”; Firefox users select “Save link as.” Select where you wish to save the file on your computer, and then click “Save.”

If you’re on a Mac, Ctrl-click on the link below. Safari users, select “Download linked file as,” Firefox users select “Save link as.” Select where you wish to save the file on your computer, and then click “Save.”

Once the file has been saved, go to the location where you saved the file and open it to begin reading.

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This book is copyrighted. You may view and download the file, but you may not copy the file or share or forward it to any other person. Used by permission. Excerpted from Start Over, Finish Rich by David Bach. Copyright © 2009 by David Bach. Excerpted by permission of Broadway Books, a division of Random House, Inc. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.

  

Thanks to Oprah Newsletter:  http://www.oprah.com/