Every week I do FREE! tax reviews of past tax returns. In many cases, I find easy solutions that would have saved the taxpayer tens of thousands of dollars in taxes each and every year.  In a few cases, I can’t find anything and I’m the first one to say that.  I never want to have someone get involved in a tax strategy that doesn’t have a good return on the time and money.

Sometimes the taxpayer is astounded, “How come no one ever told me this before?”  Or maybe they say something like, “This can’t be true.  There must be something wrong.”

The strategies we use are nothing unusual or even in the ‘grey’ area of tax law.  It’s simply applying ALL of the hundred or so strategies we’ve used for 25 years.  Do you have the right business structure?  Can you change the character of your income from active to passive?  Do you have unused losses?  Are your tax returns properly prepared, taking all the elections you should?  Those are the kinds of questions we investigate for you.  Save a thousand here, a thousand there and pretty soon we’re saving our clients significant money.  It’s not magic and it’s not a secret.  It’s a system.

This past week, some Ernst & Young CPAs received jail sentences of 2 years and more for promoting an illegal tax scheme.  They (and their clients) face huge penalties, and in the case of the guilty CPAs, even jail terms.

How do you know if your tax plan is going to put money in your pocket or if it’s going to put you in jail?  Obviously, going with a ‘big’ tax firm isn’t going to save you.  Neither is getting involved in an overly complicated, shady tax shelter that’s a secret no one else can do.  (That’s what happened with Ernst & Young and their ill-fated tax dodge.)

In fact, I’ve heard reports back from our happy clients, after we’ve saved them tens of thousands of dollars, that occassionally they asked their old advisors why this worked and why they’d paid so much in taxes before.  And they hear back, “There isn’t anything special in what Diane and her CPAs do.  In fact, I was thinking about that for you too.”

Of course, thinking and doing are two different things.  There’s nothing magic in how we save our clients money, it’s using a system to get every legal tax break available that makes all the difference.

I had to tell someone yesterday that it was too late to save him $9,500 from his tax bill.  That’s because he’d already filed his 2008 tax return and THEN sent it in for me to review.

I can tell you exactly what would have happened if he’d sent in a draft of his return for review two months earlier.  I would have looked at it and stopped it right there.  I would have shown him how we would change his 2008 return so he paid $9,500 less. Plus, we would have then been able to take the loss back 5 years so that he would end up getting a refund of at least $25,000 from past returns.

The problem is that the tax strategy involved an election that had to be made on the original tax return.  It wasn’t made and there was no way to fix it now.

Waiting two months cost him $34,500.  If it seems like you’re paying too much in taxes, you probably are.  Don’t wait!