Monday, March 3, 2014

In Defense of an Accountant

image from here
Have you started your taxes yet?

One of the things I outsource and don't try to do myself is my taxes. Whenever I have tried to do them myself, and then had an account take a look, the difference in what I save is more than enough to pay for the accountant's work, so for me, it makes sense to let the professionals handle my taxes.

In order to make the most of paying for an accountant, I do my best to know what I should save throughout the year to give to her. Admittedly, I don't know a whole lot about taxes, so a few years ago, I spent some time on the phone with my accountant, and picked his brain about what I can use. I was surprised to find out about many deductions for which I qualify.

In my experience, accountants know so much more than they share unsolicited, but once asked, they are very helpful. Without knowing much about taxes, I went into our conversation with a list of items I wasn't certain about. Even without doing much research on the topic, we've all heard about different things that we might be able to claim: Uniforms for work, dinners with clients, work supplies, a small amount of square footage (equal to the workspace) in the house if one works from home. I was surprised to learn that some traveling costs can count, newspaper subscriptions (if they are necessary in order to keep up on work-related information), and even the accountant's bill can be included. I even know actors who claim part of their cable bill, because they consider it necessary to be familiar with the TV shows for which they audition.

After I went through my list of items, he began asking questions about my work life. Do I sometimes run work errands on the way to or from work? Do I use my cell phone for work? What types of advertising/networking do I do? How do I keep up on information for my field? He brought up many suggestions, and then asked details to see if those items could qualify.

As it turned out, there were many things I had not saved receipts for that would qualify. So, then and there I started saving receipts for anything at all that had a connection to work. Each year, I now send everything to my accountant, with a quick explanation of what it is, so that she can determine if it can be included.

So that saving everything actually happens, I took a suggestion from a friend: Toss absolutely everything into a dedicated box or envelope the day you come home with the receipt. Once a year, organize it all so that the accountant can understand it, as opposed to organizing as you go along through the year. Sometimes I jot a note on the receipt itself before tossing it into the box, but only if I think I might forget what it was.

Organizing the receipts is important so that the accountant doesn't have to spend her time on it, and therefore one is charged for fewer billable hours. But doing this organization all at once, as opposed to throughout the year, makes it a much easier system to keep up, which, in turn, means it's more likely to actually happen and include everything.

While it might be too late to do this for 2013 taxes, getting started for 2014 while taxes are still on our minds is a good time to start. It doesn't require hours of research to start a list of questions for an accountant, making it an achievable first step, even if the long-term goal is to eventually be able to handle one's own taxes.

And in the end, savings may be found that are currently going to waste, but a professional will know far more than I, or any layperson does about the details of what is legal. Good luck!

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