Tax Tips: Fifteen Minutes with Accountant Joan Davion
Whether you're self-employed, an entrepreneur or working a 9-to-5 job, Joan Davion, President of The Davion Group, LLC, has the same advice -- prepare! This close to tax time it may be difficult to get organized, and preparation is a luxury few can afford. But, Joan offers some solid advice for mere mortals in the first of our Fifteen Minutes Series. The series will provide practical advice for business owners, the self-employed and others.
What should everyone -- especially the self-employed and small business owners -- know about preparing for tax season?
Organize early. If you get your receipts, expenses and income organized, that gives you a better idea of what you do have. If you work with an educated tax preparer, they’ll be able to help you with what you don’t have. They’ll be able to recommend tax deductions that you may not have been aware of. People don’t organize early and the miss opportunities for deductions. Get early tax advice. Consult someone about the kinds of deductions that are available to you as a business owner.
What's the biggest myth that you find the public holds about filing taxes?
That they’ll get audited no matter what they do. People are afraid of doing their taxes. As soon as they hear something in the news, they get paranoid. Keep yourself organized and be able to substantiate anything you put on your return. Proper documentation is key. If you can justify your reason for doing it, then 9 times out of 10 you’ll be fine.
Another myth is they think they can deduct dry cleaning. That’s only true for people who are required to wear uniforms.
Also, people do not know that they are penalized if they underpay their taxes during the year.
What's the most common mistake people make when filing?
Mathematical errors. Use a tax program and it will catch your errors. There are various websites that offer free tax preparation as well.
What about Excel spreadsheets?
Excel spreadsheets are good but the mathematical error usually happens when someone completes the form. But, yes, you can use a spreadsheet to calculate numbers.
What problem or challenge do you see the most?
Lack of organization and preparation.
Everything comes down to that?
Yep.
What should everyone ask his/her accountant or tax preparer?
How long have you been preparing taxes? Look for someone who’s been preparing taxes for 3 or more years.
Are you familiar with this type of tax return? They should have experience with your type of individual or business taxes.
Has anyone you’ve prepared taxes for ever been audited? The answer should be no.
Ask if they’ve handled your type of issues. For example, new home owners, new children, divorce or military families.
Do you have a final word of advice?
Plan ahead and know that if all else fails, you can always file an extension.
Have more questions for Joan Davion? Contact her or download her brochure (in PDF). Need forms? Go to the IRS Forms page.
Look for our next column in the Fifteen Minute Series on health insurance.
Gaea Honeycutt
blog@weirdingword.com
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