A second or third set of eyes...

Tax time is upon us.  How fun is that?  Not much, in my book.  I'm fairly organized. This year I'm going to take advantage of a class I took the end of last year.  It was a teaser class I paid $20 to attend.  You know the kind...a rep from a company targets a specific trade group and gives tips, tricks, and pointers on how to make some extra cash.  In this case the subset was comprised of Realtors.  But the larger set was the self-employed.  And the subject was tax strategies.

But wait!  There's more!  Ultimately the rep is selling a product that will save you millions, make you millions, or cost you $400 for the set of CDs, workbooks, and forms that you're never going to use, despite good intentions.  But wait!  There's still more!  Buy right now and you save a hundred bucks or 25% or get some extra CDs or forms thrown in.

Bottom line.  I bought the set.  And I don't regret it.  It is presented so well, including documentation and support, it's actually easy to follow, comprehend, and implement.  Well, except for the corporation stuff that doesn't apply to me for my business. Just like the rep indicated 'implementing just a handful of these ideas will make YOU money because you're not giving as much to the IRS.'

I know there is a fine line of knowing enough to be dangerous and knowing what I don't know.  That's why I hire pros for jobs outside my comfort zone - these days.  For instance, my first experience at gutter cleaning was on the first level of a duplex we owned.  Those were wood gutters and had a fair amount of gunk and loose dirt in them.  So I took one of my table spoons up to the roof ledge and slowly scooted around and dug out the gutters! Victory at no cost!

That looks tame compared to cleaning the gutters at the current house.  I found a new use for a leaf blower.  I would hang out the third floor windows waving my electric leaf blower in one hand and grabbing the window ledge with the other.  The blower was set to jet engine blast speed and was very effective in clearing the debris out of the gutters.  Score: 1000's of leaves zero.  Marilyn one (won). Plus it was an opportunity for impromptu Neighborhood Watch meetings as folks gathered to watch the Watch Captain clear the gutters.

When that became obviously stupid to me I hired a handy man to walk the roof with that same leaf blower.  Victory with not too much cost. Then that seemed stupid.  Now I have my licensed, insured, bonded, and skilled roofer and his amazing gang do that work.  Victory at a reasonable cost.

Back to taxes. We've had the same CPA for decades.  Over the past five years or so, it seemed he was backing his way out of the biz by down-sizing his office space, and then last year sending a note that he'd no longer meet with folks, instead all would be done by phone.  Combined with some significant changes that I'd made on my end, that ultimatum was my clue to start a talent search.  My version of American Idol.  It was American IRS (Internal Revenue Strategist).

I asked trusted folks for referrals, this time went on the incredible Berkeley Parent Network (what a resource!) and selected two highly recommended CPAs for interviews.

This was the exact process I used back in 1989 to select the guy we had for all the subsequent years. It helped that he had a brother who had been an attorney for the IRS and then opened up his own civilian practice.

Here's where the 'I-knew-enough-to-be-dangerous' concept came in.  I'd taken a huge big-time commercial real estate tax class - top of the line in the biz and the most intense study work I'd ever done (and which very few in the profession ever take, much less pass the first time).

I gave the interviewees our situation and told them I could come up with the right answers in the eyes of the IRS but needed them to come up with a defensible position.  And as different as their solutions were, I did get the same figures they did!  But telling me that we could tell an auditor we meant this and that did not constitute a defensible position.  Showing the IRS how the calcs worked was.

Now I must digress again.  This whole process brought to mind an experience clients of mine had.  I had sold properties for them over the years and helped them buy one.  But the biggest asset they had required extensive tax expertise. We got the property sold.

My client had been in touch with their long-time CPA about how to structure the transaction. The following year the taxes were done.  And then the CPA became ill.  And then it was discovered by the new accountant that the returns made no sense.

Ut-oh.  Who knew that the previous accountant had been dealing with the pre-effects of Alzheimer's?  Nobody.  That's who.  And the condition was reflected in the tax returns.  Immediately they started working to remedy the mess.

Now back to me.  When I was interviewing my potential CPAs, those extra sets of eyes on my most recent tax return came up with several identical items that I should be taking advantage of.  And they made even more suggestions. For all those years, I never questioned what was on my (our) returns, and took everything at face value.

Here's where I admit that last year, for the first time in decades, I actually participated in making decisions regarding my taxes.  I listened to what worked and what didn't.  I came up with 'what if' situations.  And in the end,  I read my copy of my full tax return, marked it up, and asked a lot more questions of my new expert.

When that class came along, I was all over it, thick as all the files laying on my floor waiting to be reviewed before being tossed into a box marked 2010. The lesson that's been reinforced to me....pay for a review, whether it's insurance, tax prep, financing, or which roses to plant.

I'll be enjoying the spring-in-January weather while multi-tasking: listening to the tax CDs on my IPod as I prune the roses.

Live richly,

marilyn

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