The Most Important Tax Advice to Help Taxpayers Make the Most of a Bad Year

2009 is a tough year for many Americans struggling to pay their taxes so it’s more important than ever to take advantage of deduction opportunities that can help make the most of a bad year. In this troubled economy, financial planning will be crucial to minimizing your tax liability.

However, the most important advice for taxpayers in this economic slump is to avoid IRS problems at all cost. If you can’t afford to pay your tax bill this year, know that the IRS offers payment plan options for struggling taxpayers. You can contact the IRS directly for tax help, however, it’s best to consult with a highly qualified tax attorney first who can help you save money on your tax bill and avoid further IRS penalties.

I’d like to take this time to remind everyone that it’s never to early to start preparing your 2010 taxes. So I’m sharing some essential tax advice that can help you avoid common filing problems, as well as some easy tips for avoiding stress during your tax preparation, plus insider insight for saving time and money when dealing with IRS.

1. Be Careful and Thorough. Avoid common problems like illegible hand writing, mathematical errors, transposition of numbers, and missing signature. These little oversights can end up costing you time and money if you are slapped with penalties.

2. Get Organized. Allow enough time to get your “stuff” in order. For example, properly categorizing your expenditures now will save you a lot of time later. Come tax time, you will be glad you grouped your expenditures by category (match it with verbiage on Schedule C if self-employed) and not by month or name of vendor payee.

3. Be Flexible. Timing your cash flow can save you money. In other words, always accelerate deductions in the year you are doing taxes for and always defer income, if you can, into the next year, thereby lowering your current year’s tax bite. If you fall into the Alternative Minimum Tax, you may want a professional to advise you.

4. Know When To Ask for Tax Help. Tax preparation tools like TurboTax and TaxCut are great, but people with anything more than a straight W-2 (including anyone with even the smallest business “Schedule C”) should be aware of the limitations of these software programs.

5. Don’t be Penny Wise and Pound Foolish. Hiring an expert CPA or EA to prepare your return is a small annual investment that can pay off big! Don’t do your taxes yourself unless you are a straight W-2 wage earner that takes the Standard Deductions (in other words, someone who doesn’t itemize or have any unreimbursed employee business expenses).

To learn more about how you can get a “head start” on your 2010 tax planning, check out my previous blog of year-end tax planning tips.

Truth is, there are tax help tips for every kind of taxpayer–whether you’re an investor or a freelance professional, you are entitled to claim certain legal tax benefits. I encourage investors to read my year-end tax planning strategies especially written for them and for freelance professionals or independent contractors to check out my two-part articles about how successful tax planning can save them money. (Year-End Tax Help Tips for Freelancers Part 1, Year-End Tax Help Tips for Freelancers Part 2).

Tax Resolution Services is a team of expert tax attorneys, CPAs, and tax resolution specialists who are here to help you through your IRS problems. Whether it’s back taxes or delinquent tax returns, our firm of highly-qualified experts are here to help you navigate your way to an IRS tax settlement. Call our office today at 1-866-477-7762 for a free tax resolution consultation with a tax attorney or CPA or visit www.taxresolution.com

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