[CAUT] PTG dues

[Carl Root]

On Jan 8, 2008, at 5:32 PM, Israel Stein wrote:

> on 1/8/08 Michael Magness wrote
>
>> I also believe that anyone who works from their home and does  
>> their own taxes is waving a large flag
>> at the IRS saying "PLEASE, COME AUDIT ME"! I'm not saying they  
>> couldn't stand up to the audit but who
>> can spare the time?
>
>> Mike
>
> Funny, I haven't been audited in 30 years of self-employment while  
> doing my own taxes. I have checked several lists of  "red flags"  
> compiled by tax professionals, and the above is not one of them.  
> And I would think they would put it at the top of the list if it  
> were true...

I agree.

I have been audited.  They don't tell you why, but I know that wasn't  
the reason.  Trust me on this.
>
> One "red flag" that is cited over and over again is claiming a  
> "home office" deduction (which I have never done).

I have from day one.  I cleaned up my office and shop in preparation  
for the audit, but she didn't even want to look at them.. "Of course  
you have an office and a shop", she said.

> Another is claiming more deductions than is reasonable based on  
> your total income.

I'm not sure there's a connection between "reasonable"  and income.   
For example, if you put an obscene amount of miles on your car but  
aren't particularly efficient in your scheduling, should they  
penalize you?

It's all about documentation.  It's also much less about proving  
expenses, and more about accounting for every dollar you've deposited  
into your bank account.

> There are others. And you are just as likely or unlikely to get  
> audited based on whatever criteria the IRS uses to pick their  
> "auditees" irrespective of who does your taxes (unless - of course  
> - they may be targeting certain professional tax preparers who tend  
> to push the envelope on deductions?) One advantage to using a good,  
> honest accountant is that they will be able to tell you when you  
> are about to create a real "red flag". And tax software does the  
> same - but I suspect an accountant might be more effective in this.
>
> The upshot of all this is - do whatever you are comfortable with.  
> Just if you are going to do your own taxes, make sure you are  
> capable of thoroughly reading and understanding the instructions.  
> And don't depend on what you knew from past years because - as some  
> people here correctly noted - the laws change from year to year.  
> What I quoted in my previous messages is based on the Tax Year 2007  
> law.
>
> Israel Stein

Forgive my digression, especially since this thread started on the  
assumption that there was no self employment income.  I've always  
assumed that any technician that owned a tuning hammer had a few  
clients on the side, but I could be wrong about that.

Carl