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There are a few things that you can do throughout the year that may help you get through tax time with less stress. First, organize your documents and keep them organized throughout the year. Search the internet for free websites that give you organization suggestions. Some of them even have templates to help you put your tax records in order. Consider a good software program like Microsoft Money which has a 90-day free trial.

If you itemize your deductions, and you certainly should itemize if you are self-employed, keep all your receipts in an expandable folder that can be organized by month, alphabetically, or any way that you want to organize it. If you are ever audited, you will lose the deductions you claimed that cannot be verified by a receipt. If you make cash donations, IRS has a formula that calculates how much you can deduct, but, as with any other deduction, you must have a receipt in order to claim the deduction. Be sure your receipts have the name, date, address, amount, purpose, type, value, and any other information pertinent to the validity of the deduction.

Unless you are really knowledgeable in accounting and tax law, a good CPA is well worth the money. The tax laws are constantly changing, and the average person cannot keep up with the changes let alone understand them. Remember that you should always make the best use of your resources, and that includes using your talents for those things that you do well and outsourcing those things that someone else can do better.

There is no absolutely certain way to avoid an audit, but people say that certain things increase the likelihood of an audit. For example, make sure there are no math errors in your tax return. If there are inaccurate calculations, the IRS will have to take a second, more careful look at your return. Once IRS is looking more closely at your return, there may be red flags that could lead to an audit. It is best to do the math correctly so that IRS never has to take a closer look at your return.

There are blogs and websites for almost any topic, and doing a little research will help you be better educated and less stressed. Don’t forget that your local library has many book about income taxes and tax returns. You may also want to look into Turbo-Tax, Microsoft TaxSaver, or one of the other good tax software. Even if you hire a CPA, you will save yourself time and money by being well-prepared and by understanding the process.

IRS also has telephone help lines that can be really helpful. The IRS website at www.irs.gov is also very helpful and easy to use. It is alright to contact IRS and ask questions. You are not any more or less likely to be audited if you contact IRS and ask your questions. As previously stated, you are more likely to be audited if you make errors on your tax return. These are just a few basic suggestions that can help make tax-time less stressful for you.

Jo Ann Joy, Esq., MBA, CEO
Copyright 2006 Indigo Business Solutions. All rights reserved.

About the Author

Jo Ann Joy is the CEO and owner of Indigo Business Solutions, a legal and business consulting firm. Indigo Business Solutions is a “one stop shop” for small businesses. We differ from other business consulting firms, because we offer comprehensive legal and business counseling. We can offer most of the professional services that a business requires. We work with our clients to develop strategies that create value and competitive advantage.

Jo Ann has a law degree, an MBA, and a degree in Economics, but she is not a traditional attorney. Rather, she is a strategic business attorney who works closely with clients to create and implement strategies that will greatly improve their performance and chance of success. Her background includes commercial and real estate law, accounting, financial planning, mortgages, marketing, product development, banking, and business strategies. She ran a successful business for 10 years, and she has written and given presentations on many different legal and business subjects.

You may contact Jo Ann by phone at (602) 663-7007, by fax at (602) 324-7582, by email at joannjoy@Indigo Business Solutions.net, and by mail at 2313 East Ocotillo Rd., Phoenix, AZ 85016. You may request free copies of her other Ezines or purchase her E-books on the website.

For more information about these and other important business topics and for legal consultation, please visit our website at http://www.IndigoBusinessSolutions.net

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U.S. taxpayers aren’t the only ones to feel a bit of a crunch at tax time. In fact, we don’t have it that bad.

You may not believe it after paying that huge tax bill in April, but the U.S. isn’t the top of the income-tax list when compared to the rest of the world. A recent study by the Organization for Economic Cooperation and Development compared the tax rates in 30 countries.

In Belgium, a single worker with the average income paid 42% of his income to the government in 2005. Twenty-eight percent went to income taxes and 14% went to Social Security, according to the study.

The German worker also paid a combination of income and Social Security that hit 42%. In Denmark, the average worker only pays 41%.

All tax rates were based on single workers with no children. They did not take into account what the employer pays in Social Security for the worker’s behalf.

In the U.S., the average worker pays 24% to income tax and Social Security combined. The rate ranks the country 19th among the 30 listed.

Mexico came in at number 30, with 8% going to the combination of income taxes and Social Security taxes.

“Countries differ in how much they decide to collect in taxes on people’s income and how much tax they collect on when good are bought,” explained Christopher Heady, head of OECD’s tax policy and statistics division.

He points out that Mexico collects a very small amount of tax when compared to the other countries. But it collects most of its revenue on the sales of goods, not on labor. Belgium, on the other hand, doesn’t charge much for sales tax, relying on labor income instead.

When all taxes were considered, including income, sales, business and others, Sweden was the top of the list. It tax revenues came in at about 50% of gross domestic product. Denmark and Belgium finished up the top three.

At the bottom of the list were Mexico, at number 30; Japan and Korea, tying for 29 and 28; and the U.S. at 27.

“The U.S. is a comparatively low-tax country. I’m sure the people filing tax returns recently wouldn’t agree with that, but that’s particularly because the U.S. collects a lot of its revenue from income tax and you don’t have a value-added tax,” Heady said.

Heady points out that high-tax countries do have benefits.

“Most of those high-tax countries have universal health-care systems. That means you don’t have to pay for your own health care or pay for insurance to cover your health,” he explained. The countries “usually have more generous state-provided retirement pensions than the U.S, so that people don’t usually feel the need to buy a private pension. There’s better provision of preschool education, and universities are cheaper. There are all sorts of public services that are provided at lower cost.”

However, he points out in the U.S. “the advantage is that you have more choice over how you spend your money, because you get more of it.”

Martin Lukac (http://www.MartinLukac.com), represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!

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