Wednesday, April 14, 2010

Taxes: Are You Crossing the Line?

Most taxpayers who have not yet filed their returns with the IRS are probably feeling a lot of stress and pressure to beat tomorrow’s deadline. However, as Nicholas Narlis explains in this article for Washington, last minute filers need to be extra cautious to avoid taking undeserved credits and deductions.

Nowadays, the process of filing tax returns online makes the actual signing where you attest to the accuracy of each filing feel less eventful. But do not kid yourself: The magnitude of placing your own "John Hancock" on these documents is the trigger to your own smoking gun. You will be held responsible to the letter of the law for its contents regardless of who assisted in preparing those forms. There is good reason why tax authorities require all applicable parties to sign in ink.

Life is filled with similar dilemmas where a decision (or inaction) could produce a very positive or extremely negative outcome. Everyone has a different tolerance for risk vs. reward. Having a keener sense of where you stand and what could eventually end up on your personal life map is paramount to effective risk vs. reward management.

The essence of this particular dilemma lies in answering this initial question: Even if the upside appears to be a sure thing, can you afford to accept your fate in the event that the worse-case scenario of a life decision implodes on you? In other words: If you can’t do the time, then don’t do the crime in the first place.

You will not be the first (or last) person to think you will luckily escape drawing the short stick in being put to the test via a tax audit. All too often, you can lull yourself into thinking the ritual of doing your taxes is more than what it is. After all, it is expected that every law-abiding citizen will complete an accurate tax return each year. But somehow people lose proper perspective and in the process also lose their own purpose in life.

Continue reading at Washington…

Blog Archive