Best Tax Software for 2016 Returns?

[mikeyis4dcats.]

Originally Posted by DRU

As I said...cautiously aggressive. You don't lie. That's where people get screwed up. You simply track all of your expenses, go over them with your CPA / EA, and you will be able to deduct all sorts of legitimate stuff that will save you thousands, and they will go to work for you (for free) if an audit happens. Some of them even offer audit insurance if you lose the case, so you're covered. Of course, that means they're absolutely doing things legitimately, so that never happens.

Meals and Entertainment, Travel...those are areas people do take advantage. Just don't take advantage. Use it legitimately, and you'll still have more money in your pocket at the end of the year than if you weren't doing that. You'd be surprised how easy it can be to make those types of things legitimate, too. For example, have a relative in another state? Make them part of your board of advisors. Guess what? Every time you go visit them or they come visit you...100% write off. Completely legitimate. Go on vacation once a year with the family? Make it your annual board meeting and the whole thing can be deducted. You just can't have 20 board meetings in a year, for example. That would be a red flag and you'd be in trouble (and your CPA/EA wouldn't let you do it anyway.)

Yes, of course, if you're paying your kids they have to be doing work. But guess what...you need a paper shredder, right? You need somebody to enter transactions and reconcile bank accounts, right? You need somebody to sort bills and trash all the garbage, right? How about social media marketers? You can find legitimate tasks for kids to do to earn their money, and it gets them started at a very early age understanding work, money, business.

They actually have a "simplified method" for home office deductions now where if you check the box you get $5/ft. at 300 sq. fb, so you get a $1500 deduction ($375 cash in your pocket if you're in the 25% bracket) right off the top. If you do have a large house in an expensive area with a big office then you can still do the standard method and use the sq. footage calculations, but in most cases now the simplified actually makes it better and easier.

So yes, absolutely, if you're doing this you don't want to be doing taxes yourself. The savings will be huge, though, and it can change your life financially. As he said, find a good accountant, track your expenses, and it will be WELL worth it.

I think your definition of "legitimate" and the IRS's are probably different. I had a buddy who's family biz found out the hard way that a drywall contractor claiming a boat, some sports cars, motorcycles and lot's of other "legitimate" expenses is frowned upon.