Why I Paid A Pro To Deal With My Taxes
Two weeks ago, I sat down at my computer with all my paperwork and began my taxes. With four jobs last year, a move, and a retirement account, I was left paying over $400 in federal taxes. Discouraged, I saved the computer file I was working on and decided to call a pro. Asking around the office, I found someone who would do it on short notice and fairly inexpensively.
Today, two weeks, three phone calls, and $95 later, my taxes are done. Federal and state combined, I’m now getting $180 back. Here’s what my accountant knew that I didn’t (among probably a lot of other things):
1) You can put up to $3,000 into your retirement account this year. That’s $3,000 saved for the future that you don’t have to pay taxes on. You can also contribute right up until April 15 for it to count towards 2007.
2) There is also a 10% retirement credit new this year. I’m not sure what this exactly means but I think retirement account money is even less taxable than before.
3) To make it worth itemizing charity stuff, it has to be over $5,350 worth.
4) He was also really interested in my moving expenses. Mileage reimbursement (which I didn’t count) is $0.20 a mile, which can add up if you’re going far (in my case, with ferry tickets and moving van rental, the deduction was worth figuring out). A non-related piece of advice: moving on/off an island is a logistical nightmare only truly understood by those who have done it.
“Looks like you’ll be breaking even,” my accountant said.
“Oh, I do love breaking even.” I told him. He probably has no idea about this blog but with those magic words, he reassured me that hiring him was a good decision.