Monday, January 9, 2012

Why “Year-End Tax Saving” Tips are a Fraud

Why “Year-End Tax Saving” Tips are a Fraud


That headline may seem a bit strong, but if you’ve followed my columns for any amount of time, you know by now that I don’t just make statements for the heck of it. So what exactly do I mean by my strong words?
Here’s what a ton of folks are missing. Which tax year are we talking about? Of course, it’s 2011. But, my friend, that year has ended and is gone. So the natural question here is: What good are the saving tips going to do anyone? Nevertheless, from now through about April 15, we will be inundated with all kinds of claims from so-called experts about these “year-end” tricks, from local to national media.

But really?


I’m not claiming to be a tax expert – I don’t even specialize in income-tax filing. But I’m not totally clueless either. I trained and worked professionally in the field of accountancy, and to date I’m a full-fledged member of the Maryland Society of Accountants.
So what I know is that once the calendar rolls over to January 1, your tax-fate for the previous year (2011 in this case) had already been sealed. You are smart, so you get my point by now that it’s completely bogus to talk about tax saving tips in retrospect.
Now to a much bigger point, and one that some tax CPAs are not going to like (except for the really good ones on whom you should spend your money who know I’m stating an indisputable fact): If your tax professional waits until tax-time (after year end) to tell you they saved you money on your income taxes, don’t waste your money on him or her. It makes much more sense (and happens to be correct, also) that you develop your tax-saving strategy at the beginning of the tax year and act on it throughout the year.
Tax professionals who really understand how taxes work in America and are not just entering your data into a computer program know this is the way to go. Besides, successful and financially savvy folks (at least the ones I know) have no use for year-end strategies. At the end of the year, they already know what happened and their expected tax situation.
It’s your money, but if it were me, I’d fire any tax professional whose focus is on all that “year-end” stuff !
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3 comments:

  1. Thanks for your post sir. Since we have just began a new year, can you help us (readers) with Tax-Saving tips so we can practice them through out the year?

    ReplyDelete
  2. Miss B,
    Your tax advisor will be the go to guy/gal on this one.

    ReplyDelete
  3. Excellent post, I have found some great tips for money saving and they really work.

    Thanks.

    ReplyDelete

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