If you prepare your own tax return make sure you have answers to the following questions (if you don’t know the answers preparing your own return could be very costly):
- When should you take the sales tax deduction instead of the income tax deduction?
- Is one of the education credits or the tuition deduction better for me?
- Utah retirees—do you know how to avoid the triple whammy when you take a withdrawal from your IRA?
- Purchase of business or rental property equipment. How should you treat equipment when you purchase it? What are the options (there are several)? When do you want to maximize the deduction? When do you want to minimize the deduction?
- Should you contribute to a regular IRA?
- Should you contribute to a Roth IRA?
- When is your state tax refund taxable?
- How do you compute basis when you own a partnership, LLC, or S-corporation?
- What are the at-risk rules when you own a partnership, LLC, or S-corporation?
- When do the passive loss rules apply when you own a partnership, LLC, or S-corporation?
- When should you report your Pell Grant as income?
Even if you know the answers to the above questions ask yourself the following: Do you understand the thousands of pages of tax code; thousands of pages of IRS regulations, rulings, procedures, notices, etc.; thousands of pages of court cases? Would you do brain surgery on yourself? Would you try to do dental surgery on yourself?