LESSONS FROM TAX SEASON

LESSONS FROM TAX SEASON

 

The April 30 tax deadline has come and gone.  Some people still have until June 15th
to file without penalty but these folks should have paid their estimated taxes
by April 30 to avoid interest charges on any balance due at filing. During tax
preparation season and especially as we approach the deadlines for filing we
see tax situations where it is difficult to advise our clients how to report
the transactions involved. The principal reason for this stems from a lack of
documentation. The most severe cases involve a total absence of written
documentation. In cases where you have to rely on oral communication and there
are alternative ways of dealing with the tax consequences the opportunity for
disputes among the interested parties is high. Equally difficult is the poorly
constructed agreement that really doesn’t address the financial issues between
the parties. Further to that is the situation where agreements are altered from
their original intention and both parties agreed to it although after the fact
they wish they had not done so. I think you may be getting the picture.
Needless to say the best course of action is to document transactions before
they are completed. Even if this costs some money up front it is well worth
it!! Call us before you sign on the dotted line and we can offer suggestions or
provide you with a clear understanding of the tax consequences.

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