Sunday, February 20, 2011

Tax planning & achieving your dreams

We are getting close to the middle of the 2010 Tax season and I can say I’ve been so busy with tax preparations.
Sometimes is exhausting, hours and hours of information research, old clients to meet, situation updates, job changes, questions to be asked, places to go, appointments to make, new clients to meet, etc.


After, I always get the great satisfaction of able to help so many people, in so many different places in life.

I can tell so many success histories, I'm not going to mention any names, but I can mention some different past situations and some current situations of the same people.

I met this lady who had two dependant children. She told me she got a refund of just about $ 2,000 for the past two years. Based on her particular information and all the expenses she had for the current year she was entitled to get a refund of more less $ 6,000

After that, I asked if the expenses and income were about the same during those past two years and the client said: "yes".

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This client had sitting an extra (about) $4,000 in the previous years that were not claimed, and I advised to let me take a look into them before the three year window overpass and then that becomes an "expired claim" in the eyes of old uncle Sam.

I have this other client who came across my path a few years ago, this client started a business and the only expense this client was writing off was "rent" and "automobile expenses". I asked him "why just those two main expenses?" and he said because his tax accountant told him those were the only ones he was entitled for the nature of his business, I was like WHAT?

To make the story short, I reviewed his previous tax returns, point the mistakes out, and offered him to claim the extra $3,000 that were sitting on each return.... And if he wanted more money he could take his last tax preparer to court too, my new client had a good laugh and took the first advice, but declined the second one... I was a little bit disappointed, "he took the fun part away"
Then there are always these cases with the new clients with no social securities, or any kind of ..... Anyway, that's solved with a simple form that allows people to get a number from the IRS that helps people to file taxes and it works kinds of a social security, but not quite.

Then there are the clients that want to save money for different goals in life like: house down payment, a new car, a wedding, a nice vacation, an exotic trip, new equipment for your work, shopping, etc. there you can always spend your nice big fat refund in whatever you want. My advice? Don't spend it, put it in a retirement account or a high yield interest account and forget about it, in just a few years I guaranteed you will have saved for yourself an interesting amount of money you can "invest", use for something income producing like: a career, a business, property, etc.


If you decide to invest your money in a retirement account, you have the option of fund your IRA or Roth IRA until the due date of the current tax season, meaning that you can use part or the total of your tax refund to fund your retirement account.

I have some clients that invest the maximun allowed for a single individual which is $5,000 per year. It seems to me this is a real smart move if you want to set aside money for the future, usually this will be money that will remain untouched until you decide otherwise (in a case of a Roth IRA) or simple IRA. The main difference with Roth is the fact that this account is funded with after tax money (earned money after taxes).


Using your retirement account to fund money for the down payment of property is also a smart move. This is a high interest savings account that has the flexibility that future property owners want.

I could be talking for hours and hours of the endless possibilities of how to invest your tax refund money, but I rather to tell you in person or by email, so do not waste any more time and contact me, you won't regret it.



1 comment:

  1. Enrique, your advise is awesome!

    Kenny, NJ

    ReplyDelete