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Got tax refund envy?

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    Rick Rodgers, a tax expert, joins us with tax savings strategies that you should start incorporating now

  • Duration 8:54
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-- Rick Rogers.

You my my friend good morning -- tax -- sorry.

And I know many -- feel like we just finished thank goodness our tax Israel last year about two weeks ago right.

But it's interactive just the right time definitely not too early to start thinking about next April.

-- lag as the best and easiest.

Question for you in -- how -- get a bigger tax refund.

Thought you need to start with thinking about how you -- a bigger.

-- what really to pay less taxes and what should be the goal.

And obviously paying less taxes we could have less income but the trick would be to keep the same amount of income and just pay less taxes -- it.

And that starts by planning planning four.

Future which this year is it especially uncertain what tax walls expiring at the end of this year and who knows what's gonna happen with tax loss next year friend and so what I wanna point out to your viewers is that.

To try to diversify your income.

When you're saving you -- -- save some money tax deferred which gives you -- advantages now but also save money tax free in Iraq which gives you tax savings in the future.

Yeah and hey guys for all you viewers if you have any questions for Rick Rogers sentence has pretty quick maybe we -- how do you answer them.

Here right on the web -- OK so on me.

If you're not happy with your refund right.

You can still -- visit this correct in -- but doesn't that raise a red flag.

Well that's the that's the concern a lot of people have about amending their tax returns.

Sorry filed and you got file by April 17 and now you discover that something has changed either you miss the large deduction.

Or maybe got one of those nasty restated 1099 steps.

Your -- SNL because something is different on the dividends and the foreign tax credit and so forth.

But there's no problem with amending your tax returns that is not an automatic.

All the trigger -- the problem that somewhat related to that is that the -- can go back three years from when you -- to audit your return right.

And so by amending that -- that clock but that doesn't matter -- necessarily mean that you're automatically gonna get audited.

What are some red flags that tax filings should be aware of.

Well the IRS has this way of looking at tax returns through a system they called DIF which is.

Differential information.

Function.

And it's kind of their closely guarded secret that compares your tax returns with other tax returns and it looks for discrepancies.

And analyzes the data and the higher your DIF score.

The more certain that you're gonna get all that it.

But I don't want -- alarm people buy that because what they're really looking for is.

If you make a 100000 dollars and you get X amount of dollars away to charity how does that compare to other people so looking at your.

Deductions and comparing it to other incomes with -- -- and are looking for discrepancies.

And so all you can find out by going to the -- -- website what normally people give them.

-- what normally people have -- deduction.

Now what happens if there's some wild swings in what you have reported in and several years you know from this year last difference and then not just an incumbent -- deductions and everything else.

Right that would fit well it certainly could explain how big should that -- be.

Well I don't want people to be frightened by an RI RS all that I know that that's one of the biggest fears and and minimize -- and quite frankly have.

And and this -- situation you just described would potentially bring your return to the attention of the IRS price that doesn't mean that you necessarily did anything wrong.

So just keep good records.

Yeah.

You don't know why do you have been saved everything oversee -- you have any can't find them out would be dealing and I know we have electronic files -- the full of credit cards and everything else but.

What should you do it right here audited.

Well you need to have those receipts unfortunately as well if the IRS does all that you and you don't have receipts and you can't read.

For produce documentation.

It could be that they will exclude that deduction.

And which case you owe tax on it.

If they suspect suspect fraud of course -- they could Levy penalties but generally but the IRS will do is say that we don't agree with the return them through this all that.

We believe that you all an X amount of dollars of additional tax they'll probably Levy interest against that and you pay and that's over.

So you should basically just admitted that you lost in your tax claim with the government and you pay Wednesday Wednesday you own you and -- are you in the clear or does this going to record.

-- C long term -- fact having been audited.

If you.

Are suspected fraud if they think that OK this person just -- fast and loose with with the taxes they don't really receive -- They don't save the receipts -- they just make numbers up.

It's highly likely that you'll get all that again and you'll come up on their radar screen quickly.

If it's just okay they were they just were a little sloppy with their records and they they missed -- placed a receipt you know anybody can do that that doesn't necessarily mean that you're gonna be on their -- Can you tell us some ways that we can up our deductions and increase our deductions -- file for next year.

Well at the key here again is to try to keep the income you know obviously you could have deductions by giving more money away so.

But that doesn't necessarily help you people think that -- if I had a bigger mortgage.

That will save on taxes and it's true your mortgage deduction is it is a deduction but even for somebody in the highest tax rate that Williams 35%.

For every dollar that you spend you say 35 cents but -- stills are out of pocket by 65 cents -- so I think the -- way to approach this is to look at.

Doing the things that you already do so if -- charitable already being terrible just going them more efficient place.

Anyway we do that is to start with the front of the tax return because that number at the bottom of the tax return is what we call adjusted gross income.

-- that number affects how much of your deductions that you get the tape.

So it affects your medical deduction of affection middle -- -- -- getting that number down.

Allows you to take more of your itemized deductions.

And one of the simplest ways for people to get that number down is to increase their 401K contributions right -- -- loves her.

Two well the maximum this year is seven.

That the maximum 171000.

And I don't wanna say Willy -- that everybody should but the maximum 401K because.

Tax planning in my opinion is about a balance -- so I wanna look at what would it take for me to get into the next lower bracket.

Okay the 45 person now can contact the point.

The 25% bracket.

Starts for a joint filer at 70000 of taxable income.

If my taxable income is at 75000.

In my projections I'd like to give an extra 5000 my 401K to get down to the fifty.

I don't want to put 101000 hours and right because I just wanna get to the 15% bracket so.

Flat -- way of looking at last question for you if you can answer quickly that would be great but I know there are massive and confusing and still uncertain changes coming to the tax code for both individuals and and businesses and small businesses think S corporation.

Gray areas -- -- that for next year what would you advise.

All sorts of people out there for next year.

What tax and certainly seems to be becoming the norm and -- pick a 140.

Always a 140 tax provision ahead texture of the -- well we have all these the bush era tax cuts expire -- the the obamacare tax increases start -- 2013 for a lot of people -- and so we don't know whether there and that's gonna be thrown out whether the tax cuts are going to be extended.

So my my advice when he still -- the and that's.

It's it's about.

Diversification really diversifying your income saving some money in tax deferred accounts get so putting some money in your 401K but also in tax free accounts also saving money -- after tax we may look back and say -- We should pay a lot more taxes and 2012 because those were the lowest rates that we ever -- Yeah that's why I wrote the book the new three like it's yeah let's.

Bring -- lecturing your your your book the -- three legged stool.

I guess people -- getting -- copy of this in -- and vindicate themselves in how.

You or keeping -- could prove that yet.

-- it's about tax efficiency and saving your money in a way that is efficient because.

Tax laws are always gonna be uncertain then -- they can always be changed and so we don't wanna put everything and tax deferred account handling to retire and find out the tax rates have gone up.

So we want to save some money after tax which is one leg.

Pretax which is one leg to get tax deferred accounts and tax free which is the third -- think and there's a lot of strategies in the books about how to do that.

Thank you so much Rick thanks for joining us have a great day there in Philadelphia.

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