IRS Form 1040 Schedule C and then some

[Israel Stein]

At 02:35 PM 1/14/2008, you wrote:
>Subject: Re: IRS Form 1040 Schedule C and then some
>Message: 9
>
>And if your client "just has one sticky key" he'd hate to call you 
>out at $??/hour and he doesn't learn anything, so he (incorrectly) 
>fixes it himself, except it makes it worse, and he winds up paying 
>you more in the end, which is what can happen to you if you solicit 
>(incorrect) tax advice from non-tax professionals... except you 
>don't just pay MORE, you pay LOTS MORE!
>
>Paul Bruesch
>Stillwater, MN

Ah yes, that old saw. The sort of client - that I absolute hate 
working with is the kind that doesn't know the first thing about 
pianos and doesn't want to know. Sort of like our friend Paul here is 
about taxes. There are some things that a piano owner should be able 
to do for him - her-self, and not need to call me. Example? One time 
I got a call from a steady client who had a "horrible noise" coming 
from the piano. A professional. So I completely juggled up my 
schedule to get over there - and found that it was a paper clip lying 
on top of some strings. I don't want - and need business like this. 
And I don't really feel good about charging for a service call under 
such circumstances - though I should. And then there was the lady who 
drove me nuts for a week until I could get back to her piano - only 
to find that it was an Xmas ornament on top of the strings. And I am 
pretty sure that tax professionals feel the same way about people who 
take up a time slot that could be a lot more lucrative only to find 
out which line to list a form they should put a particular deduction. 
The answer to that? Doesn't matter. If the deduction is legitimate, 
it doesn't matter if you put it on the wrong line.

Clients like this waste my time, create scheduling issues for me and 
tend to propagate myths about pianos sort of like some of the tax 
myths that have been put out on this list by tax know-nothings.

The truth is that the chances of getting audited - especially in our 
tax bracket - are minuscule. Since the mid 1960s I have never been 
audited - is spite of the many great fluctuations in my income level 
and manner of earning it (which are, by the way, "red flags"). And I 
know lots of people who regularly "cheat" - and never get audited. 
Not that I recommend it - but with the staffing they have, IRS can 
only audit a tiny percentage of returns and they prefer to 
concentrate on where they can get some real money (not that they 
don't grab a few small-fry every year just to keep people scared - so 
yes, an audit can happen).

And tax laws are pretty straightforward if you are dealing only with 
salary and business income from practicing a trade and perhaps a 
little bank interest. The complications set in when you get into 
investment and rental income, capital gains, partnerships and 
corporations, depreciation, tax credits, income from foreign sources, 
alternative minimum tax and all that kind of stuff.

And every tax form - and tax software package - lists all changes 
introduced in that tax year. And the software will packages will walk 
you through your return in "interview" style - so it really is worth 
the $80-100 cost, just in what you learn. So all you have to do is 
read. If you don't like to do that - sure, go to a professional. But 
if you don't mind - it isn't rocket science.

A beginning technician, he or she has time available and the picture 
is still fairly simple, would be very wise to invest some time and 
perhaps the cost of a tax software package in learning how taxes 
work. The risk is low and the reward is great - even if later you 
decide to use the services of professionals. you will be saving time 
and money in knowing how to keep records, what records to keep, where 
to look for tax deductions and even how to organize and run your 
business to maximize the tax advantages. Rather than handing the tax 
professional that shoebox of receipts that someone mentioned - and 
getting charged for the time that it takes to do stuff that you could 
very well do yourself. Late3r on, when the business develops, you can 
decide how to best use your now scarce time - do your own taxes or 
farm them out.

H & R Block - the tax people - distribute a tax package for 
do-it-yourselfers called "Tax Cut". They also offer backup services 
for user of the service - at a fee much smaller than having them do 
the taxes. Quicken (Turbo Tax) also offers such backup services. So 
there are all kinds of options available to people who want to have a 
hand in or knowledge of their own taxes - depending on your comfort 
level. So you don't need to be scared of taxes if you are interested 
in knowing something about them - even the professional tax preparers 
put out products to help you do it.

Good luck,

Israel Stein