Transcript:

When tax time comes around, are you being reactive or proactive? Do you find yourself swimming in a sea of questions? Like, is it better to do my tax return cheaply? How do I know if I’m doing them the right way? Welcome to the tax answers advisor with Marcelino Dodge. Today will answer these questions and many more, sharpen your pencils and take some notes. Now here is your host Marcelino Dodge.

Marcelino: Welcome to the very first Tax Answers Advisor, I’m Marcelino Dodge. The show today is covering what everyone just loves to talk about their federal income tax. And I do mean that in jest, because that is not the favorite topic everybody likes to talk about. But on this premiere show, we’re gonna help you learn more about what this show is going to be about. And what we’ll discuss, as well as how saving on income taxes is actually possible. When you use the correct information.

One of the many challenges I’ve seen in my years of experience in doing income taxes, and in meeting with my clients is that oftentimes, because of the way the tax code is written, and even how oftentimes some tax people explain many terminology, and such as it’s just difficult for many people, and meant just simply to understand what is happening on their tax return. And so what I’m working to do today, and as I go through this show, is to help ones to understand it better by putting it in basically, everyday language, because how we talk is the best way for us to be able to understand what is happening with our tax return, not just okay, this item on line seven is this and this item is line eight.

But what does that mean? And I see that look on my clients faces many times as to what is that? Was I what that is? Well, yes, that’s what that is, well, why did my tax person not explain that to me, all I can do is turn around and give them back a blank stare, saying, I don’t know why that wasn’t explained to you. So that’s my goal is to try to help ones to better understand what is actually occurring on their tax return.

Also, what I encounter a lot in my business, and a part of the purpose of this show, is to dispel common myths that exist when it comes to income tax, in particular, federal income tax. One of the most common myths that I encounter and even many people here is that the rich people do not pay their fair share of taxes. That is really a tax myth. And why is that? Well, when we look at actual figures from the Internal Revenue Service, the IRS which can be our friend can be our enemy just as easy.

What we can certainly appreciate when we look at this, though, think about this, people who make more than $500,000 a year make up 1% of taxpayers consider that. But they pay and this is according to 2017 figures, they paid just over 38% of the federal income tax that was collected. So is that fair? 1% of the population pays 38% of the taxes. That’s fact as of 2017. Now, not to go too many figures here, but just a couple more, if they’re in the top 10% of taxpayers, which are basically those who make more than $140,000 a year they paid 70% of the taxes, federal income taxes collected.

So once again, you got 10% of the population paying 10% or sorry, paying 70% of the taxes, federal income taxes collected. Is that fair? Now, here’s this and I know this figure is absolutely true based on my own practice in doing income taxes, the bottom 50% or 50% of taxpayers or just under 50% of taxpayers pay 3% just a little bit over 3% of the federal income tax that is collected. So once again, is that fair? That just under 50% of the taxpayers pay only 3% of the federal income tax.

You got to decide that yourself based on what the IRS his own numbers are. And I know this is true because many of the people that I do taxes for who make who would fall like under 100,000 or even around 150,000 in a year, pay no federal income tax. So yes, I do know there’s are many, many taxpayers who pay no federal income tax. So basically, the myth about the rich not paying their fair share is a myth, they pay the vast majority of income taxes that are collected.

Another common myth that I encounter in my tax business has to do with people who get married in the latter part of the year. They think many people think, and it is very common that well, I got married in December or November of the year, I was single most of the year. So I should be able to file a single or if I have children, I should be able to file this head of household. Well, according to IRS tax code, this is also a myth that is commonly propagated, and some people have filed their tax returns just simply wrong.

And with that, because it is wrong is because the federal tax code states that if you get married basically on December 31, you are considered married for the entire year. So it doesn’t matter when you got married during the year, whatever your status is, at the end of the year. That is what your tax filing status is, which means you either are filing, married, filing jointly, or married filing separately, there’ll be some other specific items, I’ll get into another shows about tax filing statuses.

But that is one, once again, if you are married, at the end of the year, you are considered married, even if you’re married 306. If you were single, 364 days, you’re considered married for the whole year, you got married on a 365th day of the year. So just another myth to keep in mind. Now many times people come in and ask or I get many phone calls. This is a myth too, that I get this immediate tax deduction. Because I bought a house. Well, there, the possibilities are there. But under current tax code law, there is no credit for buying a house. Now there can be maybe some energy credits that you may qualify for.

But that’s a whole another discussion. But yet, you also may get a deduction for your interest on your home, depending on how much that is and other deductions that are still limited on the itemized deductions. But yet, it doesn’t give you an immediate credit and improvements on a home Don’t give you a tax deduction either. Because many times with those improvements, they just add to the basis of the home, but they don’t give an immediate deduction. And once again, can get in those more details another show.

And another common one I hear coming in is people come in and say, Well, this place over here told me I’m getting X amount or $2,000 per child on my tax return. Well, there’s a whole lot of information that goes along with that and a whole another discussion. But you do get a child tax credit, which is $2,000 per child now that is there. But yet what most people don’t realize that’s a nonrefundable credit, which basically means it only goes against tax.

Now there is a refundable portion of that, which I’ll get into more detail later. But yet that that’s a greatly reduced amount, and certainly more understanding. And sometimes you need to actually be looking at the form to better understand that. What we need to keep in mind, too, is understanding another understanding I want to create with this show has to do with Tax Cuts and JOBS Act. There’s so much misinformation out there about that, like the biggest one here is that it only benefited the rich.

Well, I can tell you from my tax practice, and from my tax season since that was filed in both filing 2018 and 2019 tax returns that did benefit many, many people who made $100,000 a year last even $150,000 a year or less. How does it do that? Well, it did that because one of my previously just mentioned was a $2,000 child tax credit, which previously was only $1,000. So that doubled right there. So that benefited a bunch of people already. Also the tax rate dropped.

I don’t know how many clients I did, who their tax amount that they actually owed at the end of the year was less into for 2018 than it was for 2017. And when I explain that to the taxpayers, they were like, well, that makes sense. Thank you for explaining that to me. And then the last thing I want to mention here before the break is most people rely on some type of software in doing their tax return. Well, sometimes say, well, the tax software company should know.

But one thing I do know, in doing using professional level tax software is that you still need to understand the loss nor the tax software is doing because the calculations which tax software is great for that. However, it doesn’t always put it in the exact place where it needs to go. So he just can’t rely on software to do it, maybe on some very simple returns, it could work. But in general, tax software, you need a little bit, you need some good knowledge to be able to put it into the right place, especially when you start dealing with small business, rental houses, and other challenges and other things that can make a tax return much more complicated.

So we want to keep these purpose in mind. And these are some of the points that we’re going to cover in more details in the show as we go along over the next few weeks. Now, as I mentioned earlier, my name is Marcelino Dodge and who am I to be doing a show like this? Well, one area is I’m a tax professional with 20 plus years experience in the tax business. Also, I am an enrolled agent with the Internal Revenue Service, which basically what that means is that I am licensed to represent taxpayers before the Internal Revenue Service also indicates that I take regular continuing education classes each and every year.

And I take quite a few of these, many of them just to keep up with the changes. So and it’s very time consuming just to keep up with that. So what I want to keep in mind as we work as I go through this is just kind of educate a little bit more. And so when we do come back from the break, what we’re going to go ahead and do is discuss a little bit more about what an enrolled agent is, and a little bit more about my background. So we’re going to talk to you again in just a couple minutes.

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Today’s tax and financial environment is constantly changing. tax laws change rapidly. The traditional reactive approach to tax preparation and taxes no longer works. To deliver the best possible outcomes in today’s world. You need a year-round approach to take advantage of tax law changes and to pay as little tax as possible. Marcelino Dodge of Cash Tracks Financial helps his clients to implement proactive tax strategies throughout the year to limit his clients tax liability. Plus, with this year-round approach, clients can increase their cash flow and be as prepared for the future as they can be. Email Marcelino at success@cashtracksfinancial.com or call 844-394-4287

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Voice America Business Network. The bottom line in business.

This is The Tax Answers Advisor with host Marcelino Dodge. To reach our program today please call in the number is 1-866-472-5790 that’s 1-866-472-5790 You may also send an email to success@cashtracksfinancial.com. Now back to The Tax Answers Advisor.

Marcelino: Welcome back to The Tax Answers Advisor. This is Marcelino Dodge, I appreciate you sticking around and coming back for this premiere episode of this Tax Answers Advisor that is going to help to you to understand your personal income tax and your business income tax, too. I neglected to mention that earlier. But yes, we’re going to talk about business taxes as well in the course of this show.

So that if you have a Corporation, Partnership and LLC all of these we’re going to touch on all of these at some point in some show during the course over the next few weeks. Now back to a little bit more about who I am as Marcelino Dodge and why I’m doing this show and why I am doing this show. One is the fact that I just love taxes. Frankly. I’ve been doing it income taxes. Since the 2000 tax season.

It’s been a great time I like solving problems for people, I like looking for the answer, I like looking for that tax deduction. In order to become an enrolled agent back when I took the test with the IRS initially in 2005, it’s been altered since then. But at that time now, it was four tests, four different types of tests that the IRS administered at that time. And they were all written tests that you went to in this case.

I went up to Denver, and spent two days in Denver, a morning and an afternoon over two days taking these tests on various tax objects, from individual to business, to ethics to just general tax law, and so on. And they were pretty cumbersome at the time anyway, got through those and passed the background checks that the IRS does. So I had the privilege of being an enrolled agent since the spring of 2006.

And since that time, I’ve taken a lot of continuing education courses, I take many, many hours, probably about 40 to 50 hours a year, in education credits, just to keep up with all the changes that happen. And especially after the Tax Cuts and Jobs Act in 2017. That was a busy season going into that next tax season. So certainly, we covered a lot and we continue to do so. Now something interesting that I find with me is the fact that when it comes to most tax people that going to do taxes, that’s like the first thing they do when they come out of college.

Well, frankly, for me, that is not the case. In fact, I was in other businesses for several years, after I got out of college. And after I got out of college, graduating with a bachelor’s degree of no things, Radio and TV, it was a Mass Communications Major I had. But I ended up doing taxes, which is great. I’ve been very happy in what I do. But also in that time, actually, before I got into taxes, I was also I had also gotten into the investment business. I’m doing investment advisory work.

I’m also Life Insurance Licensed as well. So I can speak authoritatively in those subjects as well. And I’m going to work those subjects in with this business, of taxes. And with this show, because of being together of having a unique mix of the tax background, of the life insurance, and annuity background of the investment background to be able to work and see how all those will work in harmony, especially when we come in and look at things like IRAs and other plans when we look at how strategies ones can come together to help them to save money on their taxes now and even in retirement.

How you can save money, planning ahead for retirement? So indeed, these are some wonderful things to keep in mind. And as I mentioned at the outset of the show, this the main focus of this show is income taxes. Now, one thing we got to keep in mind, though, and even in the in the show, it talks about Tax Answers Advisors, the word “tax”, it’s a three letter word. But I have never seen a word that has so much misunderstanding behind it. Because when you say the word tax, there is any number of actual taxes you could be talking about.

Yes, I focus in on income tax, that is my main line of business that I do. Now, there are other taxes that we pay that often people don’t, don’t realize that fall into that and one is sales taxes. Now, I’m not going to really get into sales taxes in this show. And the one reason is, is because of the 1000s of jurisdictions that exist in this country when it comes to sales taxes, because not only do each state has its own sales tax, all 50 states, then you got counties, then you got municipalities, all of them have their own version, or own rules in regards to sales tax and they have their own percentage rates.

So in general, we’re not going to talk much about sales taxes except in the term of income tax of where their deductibility comes in. Another area that we’re going to touch on a little bit, but we’re not going to get too much into payroll taxes. But that’s also that can also be another topic that kind of relates more to income taxes, then what actually sales taxes do what we’re concerned about with payroll taxes, and we’ll probably touch on a little bit then because where it falls in with income taxes is the fact that many employers over the years have tried to get out of paying their payroll taxes.

Now what is of course, Payroll Taxes? Well, that is what the employer contributes on behalf of the employee for their social security, for their Medicare. And then oftentimes, and then depending on the state, there could be unemployment taxes that they pay for, for this state. Also, there’s some federal unemployment tax, which is very, very small amount compared to what you paid in most states. But the key thing to keep in mind with payroll taxes, many employers, they play a game with that.

And that’s not a good game to play. And sometimes what they do, and many times they do is that they pay people as an independent contractor, so that they don’t withhold taxes for the people. And also so that the person ends up paying all of their own taxes, they’re own both Social Security and Medicare taxes. Now, that is a very dangerous game, see, where most employers fail to realize those that they think I don’t want to pay these taxes?

Well, first of all, what they got to remember is that when it comes to payroll taxes, is that you’re better off treating that person as an employee when they are an actual employee. And the reason is, is because if the IRS catches you, not compensating this employee properly, the penalties they can charge are outrageous. Now, another point with that is the fact that if you give them a 1099 as an employer, and they are really an employee, if the person that you’re having an independent contractor, but they’re really an employee, but they got a 1099.

If that person goes to a tax preparer, like me, who then says, What’s going on with this? And, and really, the, the tax preparer really looks at it closely, and says, gets all the details from the individual. What kind of job did you do and get learned does really, really does the homework that a tax preparer should do in the matter. The tax preparer could look over the IRS guidelines as far as employee classification, which is a big, big matter with the IRS is improper employee classification.

The tax preparer like myself could look over the circumstances and go, you know, Mr. client, you are not an independent contractor. Why did you get a 1099? They say, well, that’s just how they paid me, which is true. It’s just how they paid them. Well, I want to inform you and advise you that because based on the circumstances you described, and based on IRS guidelines, you are actually an employee. Now, here is your options.

And this is something that I that, sadly, I have noticed is not done a lot in the tax industry is Alex, that they’re not explained to them. This is how, this is what you can do. As my client, these are the options you have. I tried to explain all of the options to my clients. And in this particular case, the option I explained to them is the fact that this is the form we can file. This is how we file the form. And this is what the repercussions are of filing this form. Now, usually they because there was no withholding on the tax or withholding on it.

They end up paying some tax because they did that Social Security, Medicare wasn’t initially withheld from their check. So then they end up paying that in but yet instead of having to pay the other half, we put in all the employer information. And then the employer is contacted by the IRS saying okay, what’s going on here because in addition to sending that information in, we also send in another form that says, here’s all the details of what this employee what this person did in working for this answering such question is, who controlled the activity, who scheduled the hours, who set the rate of pay?

And there’s a whole list of questions you go through on that form. And so what we want to do is go through that. And then as I tell a lot of people the fact that you fill out this form, the IRS will take care of it and I don’t know how many instances I’ve done over the years where I have completed the forms in this matter and the IRS has taken care of it. So payroll taxes are a very important thing. Another show are probably touch on it more in in more detail.

But that is one of simply stated, that is one of my pet peeves when it comes to payroll taxes is that employers need to not shy away from them, but they need to actually pay him because in reality, the employer is really protecting themself by doing that, because the potential risks that an employer is taking by not doing that properly, are just outrageous is not a good thing. So please, I urge all employers to make sure you a whole, you do proper payroll tax withholding.

And then another type of tax, that we’re not really going to, again, touch on very much in here, but it is one that may come up. Now, some said, some cities, some larger cities, in particular, have their own local income tax that’s held out of a check, we’re not going to really talk much about those because those rules vary so much from municipality, to municipality from one side of the country to the other, those are, those are particular to the to the rules. And the same thing is true even with states.

Now, of course, I could talk about the state that I’m in Colorado, because I’m, I’ve been here I’ve done taxes for Colorado for a lot of years, and maybe even touch a little bit on some other states. But in general, if you’re in a state that, that I’m not too familiar with, then I’m not going to comment on because I don’t know that much about that state. But there’s always ways to find out. But anyway, we’re going to not shy away. And then the same thing comes like with local taxes.

I mean, we think about other local taxes, that one’s paid course I mentioned about the local sales taxes, you got local property taxes, you got local excise taxes, you got other taxes that all fall in there, we’re not really going to go into those type of taxes, because once again, those fit into an area that are more specific to a certain area, or certain part of the country. So we’re gonna mainly just sit here and we’re going to look at the federal income tax code in a way that is just what it is, what the code is, what it actually says, not what you hear people in any anywhere say, but what the code actually says from a very objective standpoint.

And so that anybody who wants to and do it, right, can do it right. And certainly, that’s where we’re going to focus on and we’re going to touch a little bit more when we come back on how we’re going to talk about some tax planning, so that we can pay the lowest income tax that is entirely possible. So we’ll return in a couple minutes. This is Marcelino Dodge with The Tax Answers Advisor on The Voice America Business Channel.

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Today’s tax and financial environment is constantly changing. tax laws change rapidly. The traditional reactive approach to tax preparation and taxes no longer works. To deliver the best possible outcomes in today’s world. You need a year-round approach to take advantage of tax law changes and to pay as little tax as possible. Marcelino Dodge of Cash Tracks Financial helps his clients to implement proactive tax strategies throughout the year. To limit his clients tax liability. Plus, with this year-round approach, clients can increase their cash flow and be as prepared for the future as they can be email Marcelino at success@cashtracksfinancial.com or call 844-394-4287.

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This is The Tax Answers Advisor with host Marcelino Dodge. To reach our program today please call in the number is 1-866-472-5790. That’s 1-866-472-5790. You may also send an email to success@cashtracksfinancial.com. Now back to The Tax Answers Advisor.

Marcelino: Welcome back to The Tax Answers Advisor. I’m Marcelino Dodge sitting here and just trying to get something done, trying to help you to understand your tax return. One of the biggest challenges I encounter in doing tax returns is the fact that I have people come in during tax season. And they say, Well, I started a business last year. And I’m just like, you started the business. And in some cases, it’s people I’ve done business with for a while. And then my next question is, you started a business last year.

Why didn’t you come see me? And then they just kind of give me that deer in the headlights look like, anyway. But yet, where the challenge comes in with that is the fact that oftentimes, they want you to fix things, or they want me to fix things that they try to make sure they don’t pay that much tax on their business. Well, we’re talking, okay, the year ended on December 31st. And you’re in, in here in the office, like, say, February 20th.

If you’d have been in here, like two months ago, we could have done more. But we’re gonna have to run with the numbers that you have right now, which is going to be x amount of tax that you’re going to end up owing, because we didn’t sit down together ahead of time, which basically leads back to the part I’m going to cover here, which has to do with proper tax planning for the lowest income tax. And in the case of a self-employed person, would also be self-employment tax.

Now, a little bit about self-employment tax is a that’s we need to make sure you understand is that self-employment tax is the Social Security and Medicare taxes that you normally have held out of your check when you get a W two from your employer, that 6.2% to 1.4, or 5%. Now, self-employment tax also takes in the portion that the employer normally matches on your behalf. So when thinking about that, which is bad approximate about another 15%, there’s a calculation the IRS doesn’t there, but I just usually just throw out 15% just for simply planning and simplification purposes with my clients, so that we can help plan a properly.

And so as we look at tax planning, overall, whether you’re self-employed, or you’re working for an employer, minimizing a person’s tax liability, is absolutely essential and absolutely possible. Now, there’s a number of circumstances and a number of factors that can play into what can minimize your tax liability. And even when you file your tax return of how to make sure that when you do file your tax return, that either ideally you break even, or you pay very minimal tax, or you maybe get a little bit of a refund.

So that’s what I try to work with my clients to help them to work to do is to just get that nice balance in there. So basically, you’re not giving the government, the IRS a non interest bearing loan for six months, three months or whatever. We want to make sure you get the maximum amount throughout the year. And that’s through proper planning. And so in minimizing that, what I try to do and working with people is to review a plan, is to sit down and make a plan. Part of making out a plan is to help you to establish goals. Where do you want to be? Where do you want to go to? What’s your goal?

Next year, two years, three years? What do you want to eliminate? We sit down, I want to look over not just consider your taxes, but your over-all financial focus to help you get better cash flow. Now, what we do when we do that is we sit down, we work together, we review look over the current year and also look back perhaps. What did we do in the prior year, which is many times what I’m having to do with clients that we stopped we look at, this is what you did, in this case 2019 did this work?

And the vast majority of time, you know what the answer is? The answer is, it did not work. That’s why we’re sitting here now is because we need to figure out how to fix that. And we don’t want to be doing that in November, which is next month, frankly, now we would actually want to be doing that like, right? Right after tax season. And even through the summer sitting down looking at these areas, having regular meetings to make sure that you are saving time, and that you’re saving money.

And basically, what I’m talking about here is that we what we do is we take on a year-round approach, we just don’t stop and look at it at tax time, because by the time we get to tax time, it’s basically too late. Now, though, there are a few adjustments we can do at tax time, like perhaps make a contribution to an IRA, deductible IRA, or in the case of some small businesses, you might be able to do like a SEP IRA.

But those are adjustments, those help. But yeah, with some better planning, and looking at things that it’s better time of year, we can do some better tax planning, do some saving. Now in the case, for those who are self-employed and have a little like sole proprietorship business they’re operating, that’s taking good advantage of their deductions. Of course, some of that also is not just going off what you have in the checking account, that’s were working together, and having you to have a good profit and loss.

So that you know how much money you’re actually making, not just saying, Oh, I got money in my checking account, I must be doing just fine. Well, the money in your checking account is great. And it’s wonderful. But it’s not an actual position of where you are financially and where your business is made for the year. Because oftentimes, as a sole proprietor, what are you doing, you’re taking money out for where to live. And as you take money out to live, basically, you’re like drawing on the profits.

And so because that money that comes out, like that is not a business expense. And that’s money, you could possibly pay self-employment tax on at the end of the year. So where we got to come back, and that’s where working together and planning throughout the year, we can make sure that either if you need to make like an estimated tax payment through the year, you’re able to do so. And we get it set that way.

Because you’d be amazed how often I’ve seen tax returns I’ve come through a business makes several $1,000 or 10s of $1,000 in a year. The individual brings their paperwork in and brings in their the profit and loss that they determine that they made. And they know they made money. But yet they’re paying out several 1000 in taxes, not just income tax. They’re paying out self-employment tax, and their strategies that we’re going to discuss as we go through that can help ones to perhaps minimize that, and be able to do even more.

And so part of our whole plan in working with people is to not only help you save on taxes, by developing good tax strategies for you. We want to help you save time. Yes, help you save time, we want to help you to automate, because there’s a lot of work that you do in your business. And you’re good at what you do whatever that business is. I mean, there’s people here that do that I work with that do great work on truck, on diesel trucks, great work. But that’s what their business is. And that’s what they know, they don’t know what I do.

They love what I do for them because it allows them to do what they do. Got people who do great work on tree trimming, trim trees, that’s what they do. They love that they’re great at that, boy, it comes to the numbers like what I do. It’s just not their thing. And I can go on and on and on about examples of ones who are good at what they do. But yet the items that I help them with, and I work to streamline, automate, help that busy work so that they can concentrate on what they’re doing.

And then so you can concentrate on what you’re doing. My goal is to help you to make money, not just file your tax returns. That’s a part of what we do. So let’s keep this in mind as we work to not just have a little bit of planning, but to have a whole plan throughout the year. Have a plan that helps you to grow your wealth faster. We’ll work on establishing goals. You may have some pains that you have to deal with some things we got to work to eliminate?

Well, we can work to eliminate those pains for you so that you can focus again, on growing your wealth. And even in these times that we’re in right now going through this COVID. Having to stay home, maybe we’ve had more time to look at some of this information. But yet, we still need to think about taxes, and something I’m going to discuss in a later show is unemployment. Many people probably listening to this show, receive that extra unemployment from the government.

Now, one thing that I don’t know how many people realize, or even understand is that extra $600 a week that was paid is considered taxable income. Now, there’s other effects I’m going to discuss in a later show that it also has. And so these are things maybe that need to be discussed and sort of work out. And so we want to help you to be proactive, not reactive. We want to be proactive in our approaches, so that you pay as little tax as possible, as well as the fact that you can grow your wealth.

We help you develop strategies, help you to be compliant, because our overall goal is to help you as our clients to do the best you can financially and to grow your wealth because we don’t, we believe that you don’t have to be rich and famous to be able to get the help you need. We want you to be able to get that help and get better results simply by getting some proper planning done and working together with a professional who can help you not only to file a good, accurate and complete tax return the first time while at the same time also helping you to effectively grow your wealth.

We’ll be right back in a couple minutes discuss a little bit more and wrap up this first show, this is Marcelino Dodge. The Tax Answers Advisor on The Voice America Business Channel.

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Today’s tax and financial environment is constantly changing. Tax laws change rapidly. The traditional reactive approach to tax preparation and taxes no longer works. To deliver the best possible outcomes in today’s world, you need a year-round approach to take advantage of tax law changes, and to pay as little tax as possible. Marcelino Dodge of Cash Tracks Financial helps his clients to implement proactive tax strategies throughout the year to limit his client’s tax liability.

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This is The Tax Answers Advisor with host Marcelino Dodge. To reach our program today, please call in the number is 1-866-472-5790. That’s 1-866-472-5790. You may also send an email to success@cashtracksfinancial.com. Now, back to The Tax Answers Advisor.

Marcelino: Welcome back to The Tax Answers Advisor. I’m Marcelino Dodge and I appreciate you so much for being here on this initial premiere show of The Tax Answers Advisor. We’ve covered a lot of information that is, regardless of the purpose of this show and how we’re going to help you to better understand your individual tax return. How could prepare a good business tax return as well so whether you’re an Individual, you have a Corporation, an S Corporation, a Partnership, an LLC.

We’re going to be able to cover a lot of information on the shows coming up. To be able to help you to both tax returns, and there’s just so much information that it’s going to take multiple shows us to cover multiple subjects but we do really appreciate you being here. A couple things I just missed earlier I wanted to touch base on. One, is a myth that I missed that I wanted to mention is the fact that many times during the course of the year.

This often happens with children. I have a client come in, and what happens is that they’ll say well this other tax preparer says such child was claimed on a tax return, and there’s nothing I can do about it. That’s because if a child has been claimed on a tax return because they’re electronically filed that means if the return was rejected because said dependent or said child was claimed on a tax return and most commonly this happens in the case of divorced parents, although sometimes it does happen when there’s individual who shouldn’t be claiming the child, claims child are trying to get away with claiming the child now.

They always look back at them with the confused look when they say that because I’m like, that is really unusual. But whoever that is, would say that, because I deal with this, I have at least one or two of these cases, each and every taxes. And I always say, Well, no, that’s not true and it isn’t true, and I know it’s not true. You can fix that situations if your dependent has been falsely claimed on a tax return that are basically you can even say fraudulently claimed on another tax return that they’re not supposed to be claimed.

And I’ve helped many, many parents especially single parents in this case, they’re sometimes married because it’s like a second marriage for some fix that so that they get the money they deserve because the child that they claim that they’re eligible to claim we’ll get more into this in another show. But yet, if a child was claimed on another tax return, simple matter is. Yes, it can be fixed, and I certainly help once to fix such matters. Now I touched a little bit earlier on tax software, and why it’s not important, not completely rely on the tax software. Well as a professional that we’re using as a professional grade tax software, and one who’s gone to many different seminars over the years and I’ve actually heard from several instructors, where they encourage you not only to get know the tax rules and understand the tax rules, but really make sure your tax software is putting things in the correct place. Now there are many types of TAX software and there’s some design for individuals, and some that ask them questions and supposedly though we ask those questions, it’ll put it in the right place.

Now one thing on some “Do It Yourself” software, they do ask questions but if you don’t answer those questions right. Who knows what the tax software puts it? So that’s why it’s not always good in some situations to rely on this just the software, knowing where it goes, knowing how it’s supposed to be put on is vitally important that I’ve had to actually fix tax returns on a numerous occasion that were initially prepared on “Do It Yourself” software, and it was simply because the client, and they’re doing the best they can.

These are great people. They just didn’t understand they thought, this is the software and it should be putting it in the correct place. And I looked it over and I said, no this software didn’t put it in the right place. And this is how we got to fix it, which then I make a recommendation, especially if it’s gonna make a significant difference that the client file an amended tax return. And then we file the amended tax return and the client either pays a little bit of extra tax they owe, or in some cases this is actually what happens in many cases.

The client actually gets a bigger refund than they would have originally gotten. So it’s really tricky on software and so that’s why I’m always going through reviewing the rules, looking at my software going okay is this in the right place and vast majority of the time it is, but occasionally I do find where even the professional software, sometimes it’s just not in the right place. Sometimes just the fact of getting familiar with your software as well, and doing it multiple times within your software.

But yet, it is still vital to know the rules which is why I stressed the importance, especially if you have anything like small businesses, some type of farm. If you have rentals, if you are involved in some type of partnership, or an S Corp, or even a nonprofit. I haven’t mentioned nonprofits yet, you’re a nonprofit, it’s really good to have a tax professional. Do your tax return. Now an important part here of why it is so important is because as an enrolled agent like myself.

I can be there to back you up and I back up my work to represent you before the tax return. That’s the challenge if you use “Do It Yourself” software is who’s going to represent you? Or if you do certain other, or if you have your neighbor do it, or if you have this person that claims they know how to do it which we’ll probably talk about this more in another show what’s known as the “ghosts tax preparer”. The chief person down the street who uses a “Do It Yourself” software, but then doesn’t sign the tax return.

And then you get a letter from the IRS about it, and they’re like, you’re not responsible because they didn’t find the tax return as the paid tax preparer, actually that’s a whole another subject but that is something you got to be aware of and watch out for. So watch out for those things and keep in mind please that once again as we go through this show, focus on your personal and business income taxes. We want to help you. We want to help you learn about deduction.

We want to help you to know how to use your vehicle, or your vehicle can be deducted, legally, that’s what we focus on is how you can do everything legally and not just go with well my neighbor’s that I can do this, or this person has been doing it this way, or whatever the case may be, you, you cannot rely on Mr. Joe down the street. It says well my accounts been doing it this way for years. Well, one thing I’ve learned is that many, there are many people who do taxes.

And sadly, sometimes they just don’t do them right. And they’re supposed to be professionals. So it’s very, very, very cautious, which is why we really take this seriously and why we work and do this show to help once you understand that, as well as I’m going to talk about here in the last few moments about as I emphasized about planning, advising. That’s what we want to work with ones to help to do, is to do their Planning and Advising in advance, for the tax year.

Doing it, do the tax year throughout the tax year, so that they can be best prepared, have their goals established, make adjustments on your withholding with your employer, so that maybe you can take advantage of the new W-4 form which in itself is very confusing. But yet, we can help ones do that and we will help ones do that as part of our Annual Planning Program. And then of course always review in November so that last minute adjustments can be made.

So each of these areas here we want to help you to work on, and to continually work as we work as a tax answers advisor here for you to be able to maximize your cash flow, help you to grow well. And of course, make more money, focus on guarantees and have good cash flow throughout the year and eliminate any and all pain. This is Marcelino Dodge, I really appreciate you listening to this first show of The Tax Answers Advisor, and we’re going to come back again, and share even more down to earth.

Common Language tax information with you next week, as we’ll discuss about dependence on your personal tax return. Again, thanks for listening so much to The Tax Answers Advisor. I’m Marcelino Dodge.

Thank you for listening to The Tax Answers Advisor with host Marcelino Dodge. Will be back again next Wednesday at 6pm Eastern Time, and 3pm Pacific time, on The Voice America Business Channel, we’ll have more to share next week.