what to do before filing taxes

Don’t Sign Your Tax Return Just Yet

It’s almost time to file your 2014 taxes if you are here in the US and the likelihood is that you are signing a tax return you don’t fully understand.

Maybe you’ve been collecting receipts all year and are now scrambling to figure out what to do before April 15.

Or perhaps you’ve just handed everything over to your CPA or bookkeeper.

Possibly you are even trying to do it all yourself.

Either way, I can almost guarantee you are leaving money on the table. Paying way too much in taxes and maybe even opening yourself up to the risk of audit because of silly oversights on your tax return that would be easy to spot if you knew what to look for.

I remember when I was there myself.

Taxes are likely your biggest expense. And when I first started out, I really had no idea what to do to handle them properly.

So I just gave it all over to a CPA who didn’t really have my back, unfortunately. She was super conservative in some respects and just not looking out for my best interests in other respects.

I first found out how much she didn’t have my back in 2006. It was the first year my first business hit a million in revenue.

While that was an exciting milestone, my tax bill in 2007 was over $100,000 and I wasn’t prepared for it. I hadn’t put money aside to pay it and had to take out a loan to make the payment.

The worst part is that if I would have planned properly, I could have cut that tax bill in half. That would have been an extra $50,000 in my pocket that went to the government instead.

When it comes to a CPA, you really want to have a creative CPA and a financial manager who truly gets your business interacting with that CPA on your behalf. OR you want to make sure that you know the ins and outs of what’s deductible and what’s not so you can be the creative force.

In my LIFT Foundation System™, I guide you on how to find the right people to support you in your life and business so you can cut your taxes by many hundreds, thousands or even tens of thousands of dollars. The “T” for tax section of LIFT alone pays for the whole program many times over.

And that was only the beginning.

One day in mid-2007, I came home to find a thick letter from the IRS. I was being audited for the year of 2005.

I wasn’t incorporated back then because my CPA told me I didn’t need to incorporate. She said I could just file a schedule C as a sole proprietor. She said I wouldn’t see any tax benefits from incorporating and because I had a professional practice there wouldn’t be any liability benefits from filing for incorporation.

I didn’t understand any of it anyway, even though I was a lawyer. Everything they had taught us in law school didn’t seem to apply to my tiny micro business.

Don’t Sign Your Tax Return Just Yet

So I didn’t incorporate. It turns out that not incorporating is an audit flag. You are actually 9-12 times more likely to be audited if you aren’t incorporated.

That audit cost me a pretty penny to handle although it turned out I didn’t owe any additional tax money.

Not to mention, there are many benefits of incorporating your business outside of tax savings and liability protection.  I’ll share those with you in my next post.

All this to say, you can be smarter about your business life than I was.

I upgraded my own knowledge by making a million dollars worth of mistakes. Literally.

And then when I got tired of learning the hard way, I did over 100 hours of interviews with lawyers, insurance people, accountants and bookkeepers, tax advisors and strategists to find out what actually applies to micro businesses. So I could get smart.

It’s what I wish I had learned in law school. It’s why I imagine people go to business school. Unfortunately, those venues just focus on law and business for big business, not micro business.

So I put it all into my LIFT Foundation System™, including walking you through my tax returns so you know what to look for and at before signing on the dotted line this April.

If you are serious about building a business you can count on and want to feel super smart about the things you don’t even know you don’t know, this system is for you.

In the next post, I’ll tell you how I handled that tax audit so it resulted in a no change (meaning no tax due) even though my record keeping back then was totally whack. It’s a little bit woo-woo, but I guarantee you’ll want to use it if you get audited.

And I’ll share the practical business steps I took as well.

With Love Beyond the Beyond,

Get the LIFT Foundation System™ for FREE…

Marie Forleo’s B-School is open for enrollment until next Wednesday, March 4th. As a bonus when you enroll through my link, you’ll get lifetime access to her acclaimed program as well as my LIFT™ and Phase One of my Money Map™ programs for free. See the whole package including exclusive bonuses here and enroll before doors close next week.

PS – after my blog post “They Stole My Work”, which described how you can protect your work in the world and that the only real risk to your work is you not getting it out there, I was told that my former partners’ did not in fact steal my agreements.

One of the gals had bought my LIFT Foundation System™ years ago so to the extent she is using the legal agreements from LIFT, she is doing so under that license. Once you invest in LIFT, it’s yours forever and before we were in partnership, she was a LIFTee. Yippee! I feel happy knowing that and I bet you do too.

You can get the LIFT Foundation System™ on its own for your own life and business here: www.eyeswideopenlife.com/lift

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Read More:

“They Stole My Work” | The Truth About Protecting Your Work from Theft

How to Handle A Tax Audit (woo-woo + practical secrets)