Wednesday, October 14, 2009

The Tax Man Cometh

Recently I went fishing on a charter boat out of San Diego. The bite was heating up and Yellowfin Tuna were flying over the rail faster and faster as guys would hook up and yell for the gaff. It was one of those great trips. Then all of a sudden someone said ‘Hey look at this, there’s a shark !”. Sure enough, a Mako shark was chewing on the tuna the guy had brought to the boat. The crew was quick to respond and gaffed what was left of the tuna, but it was too late. The comments that went around the boat were: “The tax mans is here”, “lost one to the tax man” and “gotta pay the tax man”.

So, being the tax geek that I am, some questions immediately popped into my mind: Since we were fishing off the coast of Mexico would the shark be an international tax man? Either way he sure took a bite out of my friend’s day. Maybe my friend should have made a waters edge election…or opened an offshore account? Perhaps the boat should have negotiated a tax treaty with Mexican sharks?

Okay, no more dumb accountant jokes. I guess the point of this ramble is to point out that taxes are always a part of success. Smart people accept that fact and manage the tax burden, not ignore it. Our goal is to keep the pain to a minimum.

Friday, October 2, 2009

You never call anymore....

Recently I heard this from a fishing buddy who was teasing me since we hadn’t spoken in at least a week. He wanted to rub in a story about great trout fishing at a lake in Montana that he was enjoying while I was here at the office (aren’t cell phones wonderful?).

While I was reviewing a client’s individual tax return I was struck by the same thought. Here I could see some missed tax planning opportunities and wasted tax deductions that a little advance work could have helped save, yet I hadn’t heard from this person until well after the end of the year, too late to do anything about it. I called her and explained the situation so that she would not repeat the same mistakes in 2009, and she said that she wished she had had some guidance last year. My response was: Why didn’t you call?

When CPA’s get established and build a good following of loyal clients, it becomes impossible to anticipate everyone’s tax situation without some help from the client. It’s sort of like expecting my doctor to call me and tell me when I’m sick. If I don’t call him and schedule a checkup, or tell him I’m not feeling well, how would he know? We all tend to get in the same mode of making our payments, funding the IRA, send the tax papers to the CPA, etc. etc., and often forget that laws and personal financial situations change during the year and maybe we need to reevaluate things in order to reduce the tax you pay.

So, even if you don’t feel like your tax situation is out of control, it might be wise to make a call for a checkup. Before the end of the year, while we can still have an impact on your tax burden.