Buyer Education VII

If you've missed the earlier posts, this series is to make taxpayers aware of some preparer issues that don't make most people's lists of how to choose a tax preparer. Basically, they are preparer practices that are deceptive or/and illegal. This post is a little different but still falls into the topic.

Advice From Non-Preparers

I would suggest calling your tax professional if you are tempted to follow tax advice given by your:

• Barber/Hairdresser
• Real Estate Agent
• Car Sales Person
• Home Improvement Guy or Gal
• The Loudmouth at Work
• The Know-it-All Relative
• The Golf Cart Sales Person
• The Fund-raiser
• Anyone who will make money or benefit from you making the tax decision they are suggesting.

I am sure most of these people are good people. Some of them have heard the info they are sharing and are passing it on. The problem is that they may not understand it well enough to share, or didn't get all the restrictions, or they're wrong. Or, they are trying to sell you something and using tax savings/credit to get you interested or push the sale. I don't know how many times I have to tell someone that their house payment is not deductible no matter what the real estate agent said. Now the issue is not just the person delivering the tax advice but the  taxpayer who hears the advice and takes it as truth. That is why you have to check it out with a preparer. I'm going to give you the facts I know plus how it works in the real world.

For example - No, your whole payment is not deductible. It might be possible to deduct the mortgage interest and house taxes. The question is whether it will help you save tax money. That depends on your filing status and your other itemized deductions. Some people it helps, others can't use them. I've never been able to use my mortgage to save money.

We have a lot of special credits and deductions that have very specific qualifications. But those qualifications tend to get missed when a non-preparer is giving advice. I don't want you to disregard their advice (and risk missing a good tax saver), I want you to get a second opinion from someone who makes a living applying tax laws to individual circumstances.