Form 1040: Do It Yourself

Thought for the day:
It’s what you do with your money when you don’t have any money that really counts.

The three letters that strike fear in people’s hearts the most: I R S. It’s that time of year again and we are all faced with that dreaded task of figuring a tax return. If you get money back from the government this year then you may have already filed. If you’re like me and pay after all the year’s figures are in, then you may be putting off filing for another couple months. As long as you’re settled up with Uncle Sam by the 15th of April you’re in good shape.

Remember, Sam is your Uncle. He’s not some big, bad scary villain that’s out to get you. As long as you report all of your income and pay the proper amount of taxes on it he’s going to leave you alone. The Treasury Department will not send you a Thank You card, but you’re not going to get audited unless the numbers don’t add up. Still, a lot of people pay a lot of money to have someone do their taxes for them. Just the other day I heard about a lady paying almost $300 to a certain company (we’ll call them “I & S Brick”) to do a pretty basic tax return! I have not heard of anyone paying much less than a hundred dollars to this same company for a simple filing. This is highway robbery!

One reason folks have a “professional” prepare their taxes is that it gives them peace of mind that the taxes were done right and that the IRS will not come calling. Another is some people may even think they can get more money back by using one of these tax services. There’s an outfit currently advertising in the Myrtle Beach area that boasts, “Nine out of ten of our customers get a refund check.” I’ll bet if we pulled up the numbers nine out of ten Americans get a refund check come tax time. That’s not due to some secret way of filing that the crack staff at I & S Brick knows about. It just means that for ninety per cent of Americans the government is taking TOO MUCH of their hard earned money throughout the year.

So, here are the reasons for having someone else do your tax return:
“At least I know it was done right.”
“I can get more money back and they will have it direct deposited, so I get it faster.”
“Tax law is so confusing. I’m not going to begin to try doing it myself!”

Here’s what you’re paying for:
You take all of your income information to I & S Brick. They type whatever figures you give them directly onto a form 1040. This is the exact same form that was mailed to your house if you paid taxes last year. So, instead of transferring the figures from your W-2 onto the 1040 in the confines of your own home you have driven down the road to have someone else do it for you. And that’s convenient?

The guy at I & S Brick knows how to get your money to you faster via direct deposit. Line 73b & d on form 1040 are blanks in which to write your bank account and routing number. You have to take this information to the “accountant” who then fills it in for you.

Finally, you are paying these people because they know what their doing. That guy at I & S Brick? He’s been doing tax returns for probably about three weeks. He may be able to catch a write-off you overlooked that will get you an extra $50 back, yet you're paying him $100. This guy (or girl) took a two week course which is probably done online in a day now in order to be educated about taxes. The book the IRS sent to your house, the same book you can pick up at the library for free if you did not get one, is written at about a fifth grade reading level. Have you ever actually opened the book? There are line by line instructions and an index in the back.

Do yourself a favor this year. Use the book. Fill out the form(s) yourself. Use last year's return as a guide. If you are still not confident in your ability to do simple math or you feel you are not smarter than a fifth grader, go pay somebody $100to fill in the blanks for you.

Savings tip of the day: It’s YOUR money you’re getting in the refund check from the U.S. Treasury. If you had less taken out throughout the year that money could be sitting in a savings account or a CD! When you get this year's refund will be a perfect time to start.