Once again, it’s tax time

Alicia Robinson

The time of year is here again when people start holding their

breath, wondering how it will all turn out.

No, not the Oscars, though it is anticipated with as much

trepidation by some.

The deadline to file 2003 tax returns is drawing closer.

It’s the busiest time of year for local tax preparers, but a few

of them were able to offer some tips to help people get their taxes

in order.

First, Costa Mesa H & R Block tax associate Sid Hasin advises,

have all your papers in order. Make sure to collect any W-2 forms

from employers, 1099 forms for the self-employed, statements from

banks and brokers showing interest and dividends earned, and real

estate tax information if you own a home.

If you’re using a tax preparation service, don’t forget to bring

the Social Security numbers of your children and other dependents,

Hasin said. Those are needed to properly claim deductions.

Then find out which deductions you can claim. Hasin said the

self-employed can deduct many business expenses if they have the

right documentation.

If your employer offers a cafeteria medical plan, you should

participate, said certified public accountant Andy Favor of Ritt

Accountancy Corp. in Newport Beach. Under a cafeteria plan, medical

expenses are deducted before federal taxes, and Social Security, and

child care and other costs can be covered by some plans.

And keep track of your charitable donations, whether to the Boy

Scouts or the PTA, because those can be claimed as deductions.

“I think a lot of people really do forget how much they give to

charity over the year,” Favor said.

Other allowed deductions can include school tuition and

contributions to retirement accounts.

For the most convenient tax filing, file electronically, said Dave

Tax, a Newport Beach tax preparer. Electronic filing can be done at

home or through a tax service. It decreases the chance of math

errors, and you’ll get a confirmation from the IRS that your return

was received, Tax said.

“Most importantly, if you [get] a refund, it can speed up your

refund,” he said.

When filing by mail, refunds can take from three to six weeks, but

electronic filing can decrease that time to less than two weeks, he

said.

Some people don’t want to file taxes early because they owe money,

but with electronic filing, you can get a voucher that says what you

owe and mail it in with payment later, Hasin said.

The IRS has worked with numerous software companies to offer

electronic filing for free or for a nominal fee.

Tax preparers also said that people should become familiar with

tax laws because they’re always changing. A state teacher tax

retention credit that the state suspended in 2002 was reinstated and

can be claimed by educators on their 2003 taxes, Tax said. The child

tax credit rose last year from $600 to $1,000, so anyone who received

a $400 advance check last year needs to claim it.

If your tax preparer is not a CPA, make sure he or she is

registered with the California Tax Education Council, said Scott

Palmer, vice president of Corona del Mar tax service Cathi Marie’s.

Registration means the tax professional meets statewide standards and

takes continuing education classes to stay current with tax laws.

Finally, if you’re not happy with your taxes, get political.

Favor, who is a Libertarian candidate for the 73rd Assembly

District, said people who were concerned about high taxes should

support the Libertarian party, which favors small government and low

taxes.

Palmer cautioned about the alternative minimum tax, which was

designed to bump up the tax rate for a small percentage of wealthy

people who might otherwise pay little or no tax. But more and more

people have become eligible, and the tax will soon affect more people

than it doesn’t, he said.

“My very first tip to any taxpayer is to start talking to your

senator or your congressman,” Palmer said.

* ALICIA ROBINSON covers business, politics and the environment.

She may be reached at (949) 764-4330 or by e-mail at

[email protected].