The average person will give up $1,000,000 in taxes in their life! That’s sad, especially when you realize that most people die without ever amassing $100,000 in cash.
Think about it. Your largest family expense is taxes. We have…
- Income Taxes
- Payroll Taxes
- Sales Taxes
- Excise Taxes
- Property Taxes
- Capital Gains Taxes
- Fuel Taxes
- Utility Taxes
- Entertainment Taxes
- and Cigarette Taxes just to name a few
If you need a more concrete explanation, let’s look at a loaf of bread. There’s at least 150 taxes in the price of a loaf of bread – it accounts for more than half the cost. It begins with the first tax, on the farmer that raised the wheat, so you can imagine the long tax journey from seed to your family dinner table.
Here’s a startling fact: An internal IRS Audit determined that over half a million taxpayers overpay their taxes by hundreds of millions of dollars each year. I repeat. Millions of taxpayers overpay their taxes to the tune of hundreds of millions of dollars each year.
Fear of the IRS. The IRS probing into your financial affairs seems to describe one of life’s most dreaded experiences.
The second reason I believe, for overpaying taxes, is lack of knowledge. Not knowing about all of the tax breaks and benefits that are available to you especially, if you own your own business.
So my question to you, should you file taxes on your own or hire a tax professional?
As a young working adult who was only required to file a 1040 EZ, I still hired a tax professional to do my taxes because I wanted his name on the bottom line should there be any issue with the IRS. Add to that things like convenience, time, cost, the degree of complexity and certainly a total lack of expertise, all the major factors for never recommending anyone file taxes on their own.
I also know that not all tax professionals are equal – they can make mistakes as well.
For example, if I sent a particular tax situation to at least a hundred different tax return preparers, I could easily experience a difference in my tax bill anywhere from thirty-five thousand dollars up to sixty nine thousand dollars.
What if you were the person who paid sixty nine thousand dollars? That equates to 100% of an overpayment in taxes. How would you know? Do you think the IRS is going to notify you if you overpaid your taxes?
I don’t expect you to be an expert in all areas of your financial life. But you should make sure that you get the best advice you can afford when making decisions about taxes and nothing takes the place of a knowledgeable tax advisor.
Everyone’s tax situation is unique, and tax laws change annually so it’s a huge challenge if you think you can keep up with any changes affecting your business or industry.
My advice, don’t be in a hurry to hire a tax pro. Looking for the right person is like hiring any other employee, you wouldn’t do it without a thorough interview.
I encourage you to download my special report, Eleven Solid Tips for Selecting a Great Tax Professional so you know what questions to ask as you go through the selection process.
And of course remember America is a land of taxation that was founded to avoid taxation!