Aaaarrriba! Hola to all of my old friends at RAP. Si! Raoul is back and happy to be making your re-acquaintance. And my English has much improved better too, don't you think? I have now come north to join up with my good buddies Dickler, Braver, Matusow and Davis: "The Taxmen." I am proud to say that Raoul is now a member of the very prestigious CPA organization, Chili Peppers Anonymous.
In the coming months we intend to bring you information dealing with taxes, business decision making, financial planning, proper use of jumper cables, Mexican cooking, etc., you name it. And very soon, we plan to introduce "Raoul's Junior Tax Buddies" (exclusively for RAP members!), asking you to send us your ideas for columns, items of interest, or just plain old silly tax questions. You can look forward to hearing from all of The Taxmen: Art Dickler, Jules Braver, Drew Matusow, and Ken Davis, as they bring you their own favorite tax tips, financial pointers, and erotic IRS experiences, if any.
This month I have decided to discuss with you reasons why you should not do your own tax return. Reason number one is, because that is exactly what the IRS wants you to do. Several years ago, in the massive Tax Reform Act of 1986 (aka El Stinko Grande), the IRS introduced the concept of "tax simplification." The people they made it easier for are themselves, and they did that by shooting you the big tamale. They subjected many deductions and credits to reductions, reclassifications, limitations, and phase-outs. Basically, they made it more difficult for you to claim legitimate deductions to which you are entitled. What they hoped to accomplish by this was to create a lot more "short forms" and get you to stop thinking. In other words, "Just sign on the dotted line, Bozo."
Believe Raoul, it did not get any simpler. In fact, recently the Wall Street Journal reported that the wording of the tax code has increased by 369% during the last ten years. Does that sound simpler? Listen to Raoul, amigos. In your business if you think your tax return is simple or easy, you may not be doing it right!
I will create for you a profile. For example: You work at a radio station or studio. You are married, and your spouse also works. You have a savings account. You do some free-lance production work, perhaps from a studio in your home. You use your ride in the course of your work. You have a mortgage. You have a rug-rat in day care, and you live in a state that has an income tax. Pretty simple, you say? Caballo chips! Because, if you are doing it right, here are the forms that you will need to prepare: 1) Form 1040: Personal Income Tax Return, 2) Schedule A: Itemized Deductions, 3) Schedule B: Interest and Dividends, 4) Schedule C: Profit or Loss from Business, 5) Schedule SE: Self-employment Tax, 6) Form 2106: Job Related Expenses, 7) Form 2441: Child Care Credit, 8) Form 4562: Depreciation, 9) Form 8829: Use of Home for Business.
And now, right from the official Internal Revenue Service instructions, Raoul brings you the time which they say you will need to properly keep the records, read the instructions, prepare the form, copy, assemble and send to the IRS. And, if you think that Raoul is pulling a Milton Beryl on you, this is no joke. Just look on the first few pages of your 1040 souvenir booklet; it's right there.
Form 1040 - 10 hours, 32 minutes; Schedule A - 4 hours, 32 minutes; Schedule B - 1 hour, 18 minutes; Schedule C -10 hours, 16 minutes; Schedule SE - 1 hour, 46 minutes; Form 2106 - 3 hours, 52 minutes; Form 2441 - 2 hours, 31 minutes; Form 4562 - 46 hours, 58 minutes; Form 8829 - 2 hours, 32 minutes; Shooting yourself in the foot - 1 minute. Total time needed - 84 hours and 18 minutes.
Es correcto and truly amazing. More than two weeks to be barely knowledgeable enough of the law to take a stab at it -- and that is according to the people who are supposed to be the experts. And, of course, don't forget your state tax return! So how many of you plan to devote your vacation next year to doing your income tax? There are some alternatives.
For instance, you could ask the IRS to help you with your tax return. You could also give whiskey to the Indians. Or, you could ask your brother-in-law to help you and probably wind up with busted kishkas (enchiladas from the Jewish part of Mexico) after trying to explain to him why your music library, publications, batteries, audio expenses, and porno flicks are deductible and his are not. Or, you could retain a qualified professional. More on that in the future.
Great to be back. Hasta la vista!