NASE Blogs

Do You Suffer From PTS?

Monday, April 26, 2010

 

Around this time every year several million people suffer the ill effects of a highly contagious ailment known as PTS. For those of you not familiar with PTS, the symptoms start around mid-February or early March and include periods of heightened anxiety and stress followed by periods of anger and finally a short period of exhilarating relief.

 

What ... you may ask ... is PTS and is it curable? You'll be pleased to know that PTS (Post Tax Syndrome) is curable and every year tens of thousands of Americans discover how to deal with the symptoms and actually feel some levels of elation.

 

As we come out of the time of year when PTS is most predominant, millions of taxpayers have finished rushing around trying to get their information together in order to file their tax returns by April 15th. But ... while the majority of taxpayers have been playing "Beat the Clock", a growing number of ex-PTS sufferers are in remission and sitting back letting the clock tick-tick-tick away. In fact, many of these folks won't be dealing with their tax returns until the middle of October.

 

While you might shun these people as "procrastinators" ... they gladly accept their ways and laugh all the way to the bank. In fact, these so called procrastinators often shake their heads wondering why people who suffer from PTS complain about taxes then work so hard to hand more money over to the taxman than they are required to!

 

So what’s do ex-PTS sufferers do as a cure? Very simply they have learned how to play the game. They understand that getting a big tax refund is not good financial planning. They know (or at least surmise) that the later you file your tax return the less chance there is to get audited. They also know that during the critical tax months of March and April tax preparers are assembly lines pushing to crunch tax returns night and day. The closer it gets to filing, the less time tax pros have to look for ways to save you money.

 

And just for the record, very few ex-PTS suffers will be getting a tax refund. In fact, most of them had to send a check when they filed their extensions and they were happy to do so. You see one of the biggest mistakes tax payers make is overpaying the government. What is really happening is you are making an interest free loan to the government. For those people who have learned to beat PTS, they plan throughout the year and keep track of exactly how much is owed in taxes. The goal is that they don't owe more than $500 or $1,000 on April 15th when they file their extension.

 

And this is just one of a number of ways tens of thousands of people are finding to beat PTS. For those of you who want to join the growing number of people learning how to play the game here are a few elixirs that might help.

 

#1 - Never depend on someone else to separate your money from the taxman. That is not to say that there aren't good accountants and tax people who work on your behalf. It just means that no one will be as contentious about whether or not you get every tax deduction coming to you as you are. It also doesn't mean that you have to go back to college and become a CPA. It just means that you should spend a few dollars and a few hours every year making yourself tax savvy enough to know what questions to ask and what information to give your tax preparer to help them save you money.

 

#2 - Educate yourself. There is a wealth of information on ways to cut your tax bill and keep information organized year-round so that your tax preparer can better evaluate and help you take advantage of the tax rules. A couple of predominate places you will find this information include; the Internet, book stores, the library, and continuing education courses at local colleges. If you don’t mind me spending a few of your hard earned dollars, one of the best small business books on the market is Tax Savvy For Small Business published by Nolo Press (www.nolo.com).

 

#3 - Use your computer to keep your finances organized. Use one of the personal finance programs like Quicken or Money to keep track of your personal finances. For your business use one of the business accounting programs. And even if you use a professional tax preparer do your own tax return at the end of the year using one of the tax preparation software programs. Purchase a program to complete your return and then spend your tax preparation money and your tax preparer’s time tweaking your return and looking for deductions you might have missed.

 

#4 - Track your tax obligation throughout the year. Every month determine whether you are overpaying or underpaying your taxes. If you are overpaying, decrease the amount you are handing over to the taxman during the year. If you are underpaying, catch-up. Your goal should be to make a payment of around $500 ... but not more then $1,000 ... when you file April 15th. While the idea of handing money over to the government on April 15th might go against the grain for a lot of people, just think of it as the government giving you an interest free loan for a few months instead of your giving them an interest free loan.

 

#5 - Be a procrastinator. While there are varying opinions ... and the IRS isn’t telling, the general consensus is that the later you file the less chance there is of getting audited. This means filing an automatic extension on April 15th to file your return on October 15th. Just remember that this isn’t an extension to pay your taxes, only file your return. Along with this is another opinion, that if you use a computer generated tax return (either yourself or from a tax preparer) there is less chance you will be audited.

 

There you have it folks. Five elixirs for PTS sufferers. While you will need to make some commitment during the year the end result could be very rewarding. Just think of it as another exercise program and remember all the symptoms you have just come out of from PTS. Then do something about it so you don’t have to suffer the same maladies next year.

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