Remember that famous cartoon when Charlie Browntells the younger Linus thatChristmas is approaching and Linusblurts out in amazement, "Again?"Well, after putting your heart andsoul into last year's effort, here itcomes again, that annual adventureinto your conscience, your patience,and your wallet, called income taxseason. And isn't there also thatnagging feeling that, just maybe,you forgot to do something youtold yourself to do differently afterlast year's brush with your 1040?
FINDING YOUR SLIPS
It's almost like a New Year's resolutionthat gets honored in thebreach to plan better, earlier, and tokeep better records. We don't liketo admit this annual failure, but surveysconsistently show that whentax forms are inaccurate, it's notusually about people being duplicitousabout deductions as much asthey are inattentive and uninformed.We suffer far more fromerrors of omission than commission.
Unfortunately, and to no one'ssurprise, our errors are rarely to ourbenefit or wash out even. It's badenough that high earners pay thebulk of the tax load, but we routinelypay more than we must for 2simple reasons: We don't knowenough about the labyrinthine taxcode and the annual changes thatfurther befoul it, and consequently,we don't appropriately documentour financial activity. It isn't aboutpassing an audit—though that is arare and horrible consideration—rather, it's about the high cost ofleaving things to an annual visit tothe traditional shoebox of receipts.
VISITING THE EXPERTS
A CPA should lead you throughall of this. We need an expert tokeep abreast of what is required inour individual situations and to tellus what we could do to our advantageand when to do it. Soundfamiliar, kind of like a doctor? If youwant to retain as much as legallypossible from your hard-earned andHMO-limited income, heed thisadvice. If you don't have a CPA orone that you fully trust, ask yourwealthier or more financially savvyfriends for a referral. Or check withyour medical society for a CPA theymight have dealings with who isfamiliar with docs'issues. When weresist going to a CPA, maybe a partof that is because of the associationwith some of the unpleasant activityinvolved. Something like avoidinga visit to the doctor, perhaps?
If you balk at a top CPA's fee,remember it is deductible and itcould bring you a bigger savings inyour taxes than it costs. Also,there's comfort knowing you didn'thave to spend as much time oreffort out of your element had younot used your CPA's help.
, a partner
on the Stanford Graduate
School of Business Alumni
Consulting Team, teaches in
the Stanford School of Medicine
Family Practice Program. He welcomes
questions or comments at email@example.com.
Jeff Brown, MD, CPE