The Tax Club Report

The Tax Club Investigates: When It Comes to Taxes, Don't Bet on the Software

            Recently, a company that makes tax preparation software sponsored a poker game on national late night television.  The contestants ended the game by opening up envelopes holding their returns and being surprised at their refunds. A man with a green visor was the dealer, and he wore the company's logo on his shirt. The point seemed to be, "See? Doing your taxes and seeing the outcome is just like poker!" It may seem like an apt comparison. However, for these sorts of companies, the poker gimmick is not just for fun and games: it's a necessary angle of advertising.

            Poker is a game of luck, because your odds of walking away with the money depend a whole lot on the cards you can't possibly predict.  Anyone who figures out a way to calculate those cards reliably is banned from the game. Though professional players have devised strategies to deal with the unpredictability of the game, anyone who knows the rules can lose or win big. These software companies benefit enormously by making taxpayers think they won their return in a similar manner. After all, why try to plan next year's refund, or get the advice of a real live accountant, when the chips could fall anywhere?

            In reality, preparing your return is a game of strategy, more like chess than poker.  It's a game that is played during each month of the year, not in the three months of tax season following the year's end. Now that tax season is over, here are some easy tips on how to optimize next year's refund.

1. Begin with making contributions into your retirement account such as a traditional or Roth IRA. An Individual Retirement Account, or an IRA, is a bank or brokerage account that allows one to set aside money each year for retirement. It's a win-win choice, one that your accountant and your future self will much appreciate. The best part is that it is deductible "above the line", which means you don't even need to itemize your deductions to take advantage of the benefits.  However, consult with your accountant first and let them make the decision on how much you can contribute. Your accountant will need to consider other factors such as your income level and whether you are covered by your employer.
2. Converting your IRA to a Roth. Generally, the goal is to defer taxes to future years but with the impending increase in the income tax rates, it makes better sense to convert your retirement account to a Roth this year. There are no income limitations to Roth conversions and you are given the option to defer the tax on this over a two-year period. However, consult with your accountant first if this action will benefit you taking into consideration your personal tax situation.
3. Increase your itemized deductions by documenting your charitable donations. For example, if you and your family are moving, why not donate any furniture or clothes you won't keep? Make sure you ask for a receipt from the charitable organization you made the donation to. Holding on to that receipt ensures that you will see your charity rewarded. If you are looking to buy a new car this year, consider donating your old one. In order for your contributions to be deductible, make sure the organization receiving the donation is a qualified institution accepted by the IRS.
4. Keep track of your medical expenses. And not just the obvious ones! Glasses, fertility treatment, hospital services, lab fees, and glucometers all count. You can even deduct the cost of parking and transportation to and from your doctor's office, or the cost of capital expenses for medically-related home improvements. Be sure to keep a mileage log to support the miles driven for medical purposes though. And speaking of home improvements.....
5. Make your home more energy efficient. If you are thinking of updating your windows, doors, roofs, or heating/cooling systems, check out which choices will give you the most credits at EnergyStar.gov. There are some important energy tax credits available that will help you get some tax savings and they are set to expire at the end of this year. Not only will you get more money back next year when you file your taxes, you will also save more on your electric bill as well. 
6.  Get a personalized tax plan. Schedule an appointment with your accountant and go over the strategies you can implement to save more in taxes. It is best to have a tax plan in writing so you can refer to it throughout the year. Having a written plan produces a higher probability that your goals will be achieved efficiently. More often than not, those taxpayers who owed money on their returns do not have a tax plan or strategy in place that would have prevented them from owing in the first place. Taxpayers with a written plan save money and get better refunds at the end of year.
7. Qualifying the sale of your home for tax exclusion. Did you know you can exclude all or part of the profit from the sale of your main home?  Yes, you are reading this correct. This exclusion is up to $250,000 for individuals and $500,000 for married taxpayers filing a joint return. In addition, this is not a once in a lifetime event, the exclusion can be claimed each time you sell your main home but generally not more than once every two years.  In order to qualify, you must meet the Ownership Test and the Use test as provided for in the tax code. The ownership test requires that you must have owned the home for at least two years in the five year period ending on the date of the sale and the use test requires that you must have lived in the home for at least two years during the five year period that you have owned it. Before placing your home on the market, be sure you meet the above IRS requirements so you do not have to pay taxes on the gain from the sale.

So remember, your return is not a card game, and your refund is not in chips. It is a reward for carefully planning your finances throughout the year. To keep you on track, do not substitute a trained accountant with a program you install April 1^st and uninstall April 16^th. Now that would be a true gamble with dire consequences. There are many more ways to optimize your finances this year, and one of our professionals would be happy to talk to you about them. For a free consultation, call the Tax Club at 888-773-7176.

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If you are losing your wireless connectivity on your DLink router, Model DIR-615 H/W version C1, here is the fix.

1. Go get the new firmware update 3.12NA by clicking here --> http://www.dlink.com/products/?tab=3&pid=DIR-615&rev=DIR-615_revC
2. Save above file to your Desktop
3. Go to the file on your desktop and rt click, then click extract all, then press enter on keyboard
4. Log into router via web browser by typing in the address bar, 192.168.0.1
5. Log in as Admin
6. Click Wireless Settings on lft menu bar
7. Click Manual Wireless Connection Setup btn at bottom of page
8. Under the Wireless Network Settings div, uncheck the box Enable Auto Channel Scan
9. On the Wireless Channel drop down, select Channel 6
10. Choose WPA Personal, under Security Mode div
11. Choose WPA2 Only, under WPA div
12. Enter Pre-Shared key you will remember
13. Scroll to top and click Save Settings.
14. Click Interner on lft menu bar
15. Set Primary DNS as 192.168.0.1 and Secondary DNS as 4.2.2.2
16. Scroll to top and click Save Settings
17. Click Tools on horizontal menu bar
18. Click Firmware on lft menu bar
19. In the Firmware Update div click browse, Click Desktop and navigate to the previously extracted folder named "dir615_revC_fw_312NA."
20. Double click on the bin file inside of this folder named "DIR615C1_FW312NA.bin"
21. Click Upload in the Firmware Update div. **Be patient, and make sure you are using a wired connection, not wireless.

Done - Enjoy!

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