In This Issue February 2012
~Go ALONE or have a Pro?
~Long Term Care Insurance
The True Cost of Do-It Yourself Taxes
When you use software to file your income taxes, there's a moment, an instant just before the point of no return, when you silently wonder—what if?
What if I didn't enter the numbers correctly?
What if I miscalculated?
What if I missed a deduction or credit?
What if I claimed a deduction or credit I'm not eligible for?
All that uncertainty is one of the downsides of self-filing. Other disadvantages can hit you where it hurts most—your wallet.
Since most folks aren't tax experts, it's easy for them to miss deductions or credits when they self-file. They are also more likely to take the standard deduction instead of itemizing their expenses. Either of these mistakes could lower their refund.
Take a look at these numbers from our recent survey of 2,000 of Dave's Facebook fans.
Those folks potentially lost hundreds of dollars by trying to save a buck and doing their taxes themselves. It doesn't seem like such a smart choice now, does it?
The cost of DIY tax prep isn't limited to the size of your refund. Your mistakes can also cost you in the form of penalties and interest.
The IRS checks every return for a signature (manual or electronic) and math errors and cross-checks all sources of income that are reported via W2s, 1099s, etc. So if you fail to report any income or enter the wrong number in the wrong column, the IRS will call you on it.
And if it turns out you owe taxes, by the time the IRS notifies you, penalties and interest will have already inflated that amount. You'll be charged a penalty for paying late and you'll be charged interest from the date the tax was due until the date of payment, and it compounds daily.
By working with a tax professional, you'll not only have confidence that your taxes will be done right the first time, you'll also have peace of mind that your tax professional will be there to help you if the IRS has questions about your return. File with tax software, and you're on your own if the IRS comes knocking.
It's important to work with a tax pro who will explain your taxes to you so you'll understand how you can save on taxes all year. Straight from DAVERAMSEY.COM
Long-Term Care Insurance Premiums
In case you've been thinking of the possibility that someday you may be fighting a chronic illness, purchasing a long-term care insurance policy not only helps pay for such expenses, but it also has current tax benefits.
But that's not all. If you pay eligible long-term care insurance premiums for a parent, grandparent, or other family member whom you report or who otherwise qualifies as your dependent, you may include his or her premium when you calculate your deductible medical expenses.
Eligible long-term care premiums count as part of your total deductible medical expenses, and you may deduct medical expenses that exceed 7.5% of your adjusted gross income in a given year. While some individuals will never see that many medical bills a year, for far too many others, astronomical medical expenses are a daily reality.
No one wants to picture themselves or their family members in a critical, long-term situation, but health deteriorates, accidents happen, and diseases attack. If you have long-term care insurance, I can help you take advantage of the tax benefits available. If you don't have this insurance, together we can evaluate its potential impact on your family.
We welcome the opportunity to meet with you to discuss your long-term care insurance needs. Please contact us to set up a complimentary one-hour consultation to discuss your needs and how we can help you.
Don’t forget to check out the various resources and helpful items on our website
______________________________ All proceeds are donated to promote financial literacy across America
All proceeds are donated to promote financial literacy across America