This creates an opportunity to receive the benefit of a deduction BEFORE you actually make the deduction!

What do I mean? As an example, say you:

• Are in the 28% federal tax bracket and you want to give $1,000 to help the Haiti Earthquake victims.
• Complete your taxes (using Kwik-E-Tax, of course. Click the button at the top right of the page to start for FREE). Include a $1,000 deduction for Haiti Relief as a charitable contribution on your taxes. Your refund is $280 larger ($1,000 X 28%).
• File ASAP but no later than Feb. 17th.
• File your taxes by January 27. You should get your refund direct deposited to your bank account on Feb. 5!
• That would give you a $280 interest free loan from the federal government that you would have to repay with your $1,000 Haiti Relief charitable contribution 23 days later on 2/28!

BUT…and here’s the fine print, you had better get your $1,000 contribution in to a charitable organization that is providing relief to the Haitian people affected by the earthquake by the Feb. 28th deadline. Miss it, and you are no longer entitled to keep that $280 tax savings.

If you gamble away the $280 at a casino hoping to win $1,000 (or more), tough. Amend your return and pay it back by 4/15/10 or you are committing tax fraud and may be required to run for public office or worse.

Now here’s information about where you can contribute to help the victims of the earthquake in Haiti without getting scammed. http://lifehacker.com/5447987/how-and-where-to-donate-to-haiti-and-avoid-scams

(Excuse the excessive exclamation marks! We’re a little excited!!)

Start a FREE Kwik-E-Tax account to enter your taxes today, January 15th, 2010! You can submit today to efile or you can work in all the possible deductions you can. As long as you efile it by  January 21st, you can have your refund direct deposited into your bank by January 29th! Before the end of the month!

Here are some Kwik-E-Tax benefits:

1. Your federal, state returns, and city returns PLUS electronic filing for less than $35.00!
2. No huge bank fees! In fact, NO bank fees!
3. No extra charges for state returns or city returns!
4. Able to file multiple state and city returns.
5. Pay NO money to prepare your taxes by using your Paypal account OR,  EVEN BETTER
6. Use your federal refund to pay for your very small Kwik-E-Tax fee! Your Refund minus the fee will be direct deposited or mail to you (your choice).
7. FREE to try! Just start entering your information. Use it to check yourself or a preparer, or tax software. No charge (FREE!) until you use Kwik-E-Tax to file your taxes!
8. Ability to ask tax questions and get answers from a CPA! Just leave a comment with your question. If you have a Kwik-E-Tax account opened, we will address your question FREE! NO ONE ELSE OFFERS FREE CPA ANSWERS TO YOUR TAX QUESTIONS! (sorry, we had to scream it with ALL CAPS!! We’re, you know, Excited!)

Kwik-E-Tax…as Fun as Taxes Get! (Aren’t BIG, FAST REFUNDS at low prices fun? We think so, too!)

How about:

1. Naming your pets with human names so you can deduct them?
2. Deducting 2 of your neighbor’s 4 kids so you can both maximize the Earned Income Credit (EIC)?
3. Keeping your dead spouse on your return so you can continue to claim them AND file Married Filing Jointly (MFJ) because “they would have wanted it that way?”

Do you have any more?

There are a lot of questions to be answered BEFORE one enters a partnership, especially one that is not a “cookie-cutter” type. A “cookie-cutter” would be 2 partners, each entering the partnership with half the cash for 50% of the profits, losses, and any capital distributions. Anything more complicated than that requires clear forethought and a lot of “what-iffing.”

There can be different results for taxes and books. Sounds boring until it’s you on the receiving end of a huge tax bill with no matching income to pay it!

One more thing about screwing up a partnership (that’s a technical legal term I borrowed from someone…not Gary Scwartz), there is not always an “undo” button to reverse the calamitous effects of the error(s). (Usually, there is more than one error!)

Lesson to be learned: unless you’re cutting cookies with your partnership, see a professional…or two!

The Clients were more than a little happy. Their balance was less than $400 for both years instead of the nearly $30,000 the IRS originally intended to collect!!

To help someone save over $29,000 is always a rush!!

If you need bookkeeping services, we can refer you to her. Call me for details.

But many times a “FREE” offer is misleading. [This gets better. I promise!]

When you get a FREE offer, your first reaction (if you are older than 6 ) is probably, “What’s the catch?”

Consider these the details of the FREE and Not-So-Free Tax Prep offers from other Tax Sites include:

• Omissions  No State or City income tax returns.
• Limitations  Missing city taxes or other forms that you need. Only 1 state. Sometimes you need more.
• Constraints Nothing harder than an EZ return. Also, your income must be in a certain range to get their “Deal.” This is discrimination based on income! 
• Conditions Need a coupon or must buy something else first such as other software. Also, can’t try before you pay.
• Additional costs Extra cost for state taxes, e-filing the government’s copy, printing a copy for you, filing for an extension, more complicated taxes like when you file as a married couple instead of 2 single persons or you have a business, sold stock, receive Social Security, etc. The large number of exceptions mean that nearly everyone will be paying more than FREE, sometimes a LOT more at the end.

You get the idea. Many times FREE really isn’t. But sometimes, (infrequently), the planets align and what is offered for FREE, even considering all of the omissions, constraints, conditions, and additional costs is actually FREE (rarely) or at least acceptable for our purposes at a particular time.

We always hope for that. And that’s why we are so attracted to FREE! But free isn’t always the best deal.