Check out these four tricks used to get you to spend more (without you knowing it).
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Recently, we asked Dave’s Facebook fans to share their tales of tax terror, and the “been there, done that, got the T-shirt” stories poured in. If the thought of messing up on your taxes gives you the heebie-jeebies, here’s proof you can face your fear and live to tell it.
Oops With Zeroes at the End
Some tax mistakes cost more than others. These two Facebook fans had dollar signs in their eyes in the worst way.
- For six years, Jess B. from Henderson, CO, claimed mileage for his sales job without having a detailed driver’s log as documentation. When the IRS came a-knockin’ in 2009, his generic mile tracker didn’t hold up. “They hit me for over $16,000 dollars in penalties, interest and reimbursement,” Jess says. If that wasn’t painful enough, now he gets audited by the IRS every year.
- Jess’s tax bill doesn’t hold a candle to the one Megan H. from Troutman, NC, received. Over the course of three years, her small business racked up $130,000 in tax debt. She started out with good intentions, setting aside 30% for taxes, but spent the money on other things along the way. Thankfully, Megan’s mistake came with a silver lining. “Without the tax debt, I never would've read Financial Peace. Without Financial Peace, I never would've learned the joy of giving,” she says.
Counting Eggs Before They Hatch
It seems appropriate that this story starts at the county fair. But Susan S. from Bellafonte, PA, and her husband weren’t buying chickens. They were wooed by a snow blower. Since they didn’t have the cash for it, they signed on for a payment plan with no interest until April 15. It was the perfect solution because they could use their tax refund to settle the bill—or so they thought.
Susan filed her taxes in January and came to a shocking realization. “We owed taxes for the first time,” she says. “Now there would not be money to pay off the snow blower, and we had a tax bill to pay.”
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The next two and a half months brought lots of scrimping and saving, but they knocked out their tax and snow blower debt by April 15.
“Seeing how much we could save in two and a half months started us on the road to debt-free living,” Susan says. Her lesson learned? “It's better to be covered by snow than debt!”
A Reversal of Misfortune
Several years ago, Erica T. from Richmond, KY, was so busy making sales that she didn’t take time to keep her books. Afraid her success meant she owed the IRS a ton, she let it pile up for three and a half years.
As fate would have it, the love of her life came along and swept her off her feet. After two years of dating, they tied the knot, and Erica decided it was time to fess up to her big tax secret. With her husband’s encouragement, she worked on her bookkeeping every night until she got caught up.
“We couldn't file our taxes together until I did, and I certainly didn't want to punish him for my laziness and stupidity,” Erica recalls.
It took her a month, but she did it and was surprised at her findings.
“It turns out I didn’t owe the IRS—they owed me,” she says. That’s the good news. The bad news? Because she waited so long, the statute of limitations had passed, and she had to forfeit almost $3,000.
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Father Knows Best
Jennifer F. from Watervliet, NY, prides herself in being an independent woman. So after getting married five years ago, she decided to flex her financial muscles by filing her taxes on her own instead of having her father, a CPA, do them for her.
“I filed ‘married filing single’—because I’m independent, remember?—sent the papers to the IRS and mailed a copy to my dad. (Oh, I was going to make him proud!) A few days later, I got a call from Dad,” Jennifer recalls.
As you can probably guess, her dad wasn’t calling to congratulate her on a job well done. That independent streak had cost Jennifer and her husband $4,000! Luckily, Jennifer’s dad corrected their tax return so they didn’t have to live with that costly mistake forever.
Avoid Big-Ticket Tax Blunders
So your dad’s not a CPA. No problem! We’ve got the next best thing: Dave’s nationwide network of tax Endorsed Local Providers (ELPs).
Dave’s tax ELPs are licensed professionals who have earned Dave’s seal of approval for excellent service and advice. Your ELP has spent years helping folks get their taxes done right the first time, and you can trust them to do the same for you.
Whether you’re an industrious entrepreneur or a busy mom, you’ve got too much on the line to leave your taxes up to chance this year. Find the tax pro Dave recommends for you today!