Personal Finance News Wednesday 3/27

Phil's Personal Finance Tip of the Day:

Filing your taxes? 7 things to check first
You’re responsible for what’s in it — whether you prepare it or not

By Eva Rosenberg, MarketWatch

If you’re not checking your tax return before it gets sent to the IRS, you could be in for some nasty surprises.

Did you find a tax pro who swears she can get you better refunds than anyone else in the world? Do all her clients get great refunds, and you can’t figure out why you and your accountant can’t get the same result? Is she smarter than everyone? There’s a reason she can do this. She’s committing tax fraud. What happens when your tax preparer commits tax fraud? You get into trouble.

Consider the case of someone who is being audited because her tax preparer took deductions for business expenses. She can’t provide receipts for those expenses because she doesn’t have a business — or any such expenses. She is rightfully nervous. By the time the IRS gets done with her, she will owe the taxes on those fraudulent expenses, several types of penalties — and interest on the whole shebang.

The first thing you need to know about any tax return you sign is this — there are some words over your signature:

“Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.”

Read your entire tax return. Don’t put up mental walls and blinders. You are responsible for what goes into those pages. When you see something that you don’t understand — ask. If your tax preparer refuses to provide answers, or to let you see your tax return before it is e-filed, take your papers and records and leave.

These seven steps will help you prepare your own tax return properly — or to catch your preparer’s errors or fraud.

To read the entire article from Eva Rosenberg, MarketWatch:
http://www.marketwatch.com/story/filing-your-taxes-7-things-to-check-first-2013-03-01?pagenumber=1

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Hi my name is Philip J. Miano and I am the founder of PJM Personal Finance and Productivity Coaching specializing in Budgeting, Debt Reduction, Bank Reconciliations, Goal Setting, Time Management, and Organizational skills. Please visit my website: http://pjmcoaching.com.