5 Tax Myths That Are Costing You A Bundle

This article is based on the following 2 assumptions:



1) You are a small business owner or self-employed person

(including home-based and/or part-time businesses).



2) You don't like to pay taxes. In fact, whenever you think

about paying taxes, you get so mad you end up "all lathered

up and nowhere to go."



Now, if paying taxes makes you so upset, what have you done

about it lately?



Why was your tax bill so high last year?



You paid too much tax last year (and the year before that,

and the year before that . . .) because you have probably

been an innocent victim of many popular myths about taxes.



Here they are. Get rid of them or you'll be stuck paying

too much tax forever!



Tax Myth #1: "I don't make enough money to worry about

reducing my taxes."



Nothing could be further from the truth. People at all

levels of income can pay less tax.



Tax reduction strategies are not just for the rich and

famous. No matter how much money you make, you can pay less

tax than you currently pay.



In fact, even if your business (or part-time entrepreneurial

venture) has a loss, you can use that loss to offset other

sources of income, such as wages from a "regular" job, your

spouse's wages, investment income, rental income, and other

business income.



Tax Myth #2: "Tax reduction strategies are too complicated

for me to use."



Again, hogwash. There are plenty of ways

for you, the average American, to lower your taxes.



Tax reduction is not just for the wealthy who pay high-

priced attorneys to finagle their way out of paying taxes

with sophisticated tax-avoidance schemes.



The average Small Business Owner has plenty of tax reduction

strategies at his/her disposal. You just have to know what

they are and how to use them.



Tax Myth #3: "I had my return prepared by an Accountant, so

I know I paid the right amount of taxes."



There are thousands of excellent, hard-working accountants

doing a great job. And if you use a tax professional, maybe

he/she has done everything possible to reduce your taxes to

the legal minimum.



Based on my own experience, however, I'm convinced that many

taxpayers who use professional tax preparers are overpaying

their taxes, sometimes by thousands of dollars each year!



Why is that? There are many reasons. The most

obvious one is this: Many professional tax preparers are

just that -- tax preparers and tax preparers only.



A good tax accountant may know how to prepare a tax return

in his/her sleep. He knows the forms backwards and

forwards. He knows what numbers go on which form perfectly.



But that's it. That's all he/she knows.



A good tax preparer is not necessarily knowledgeable in tax

reduction strategies. There's a big difference between a

good tax preparer and a savvy tax reduction specialist.



When you look for a good accountant, make sure you find one

who doesn't just "do the returns", send out a bill and say

"Next, please."



Tax Myth #4: "My tax situation is OK because my BLANK (fill

in the blank with a family member or other "good friend")

takes care of my taxes."



There are various versions of this myth. Do any of these

sound familiar?



"My brother-in-law takes care of my taxes."

"My uncle takes care of my taxes."

"My college buddy takes care of my taxes."



And of course, the same problem exists with Myth #4 as Myth

#3. Even when someone you know and trust does your returns,

how do you know that this person is a good tax reduction

specialist?



And often, many of these family members or "buddies" are not

even professional tax preparers. This person just happens

to be "The Family Accountant. Just like every family has

one person who knows a lot about cars (or mutual funds, or

carpet cleaning, or whatever), many families have someone

who "knows enough to be dangerous" with regard to taxes.



And even if your "Family Accountant" is a professional tax

preparer, he's probably not charging you for the return.

He's doing you a favor. He prepares your return; you change

his oil. If he's doing the return for free, you are getting

what you pay for.



Tax Myth #5: "My tax situation is OK because I prepare my

own returns."



If this statement applies to you, then perhaps you are a

"do-it-yourself-er". Money is tight and you are used to

doing things yourself anyway, so why not save a few bucks

each year and do your own returns?



So you've spend countless hours over the years pouring over

the forms and instructions, trying to figure out how to do

the returns. And you've done OK. No letters from the IRS,

no audits. Hey, pat yourself on the back!



And now that tax preparation software is so readily

available and affordable, doing your own return is a breeze!

Just key in a few numbers here and there, push the print

button, and presto, you've got your return done in record

time! And now you can even e-file your return with your own

computer.



Have you ever heard of the book, "The Millionaire Next Door"

(by Thomas J. Stanley and William D. Danko)?



This book describes the common characteristics of

millionaires in our country. My favorite millionaire

characteristic is this:



Millionaires become millionaires by minimizing their taxes

and getting their tax & other financial affairs in order.



Now comes the "Million Dollar Question": How do you think

millionaires get their tax affairs in order? By doing their

own tax returns? Of course not! Millionaires NEVER do

their own tax returns! They have more productive things to

do with their time.



Instead, what millionaires do is spend time and money each

year on tax planning and tax reduction strategies, not

figuring out what number goes on which line of Form XYZ.



So my challenge to you is this: What are you going to do

this year to reduce your taxable income?



Are you a believer in any of these 5 myths? Now's the time

to get rid of them, once and for all.



Your financial well-being depends on it.





Wayne M. Davies is author of 3 tax-slashing eBooks for

the self-employed, available separately or as a 3-volume

set, "The Ultimate Small Business Tax Reduction Guide".

http://www.YouSaveOnTaxes.com/ultimate-guide



To get your free copy of Wayne's 25-page report,

"How To Instantly Double Your Deductions" visit:

http://www.YouSaveOnTaxes.com