Or Billy Joel, or Wesley Snipes, or Willie Nelson, or…let’s face it, the list gets long fast. So many celebrities, professional athletes, and others making what seems a lot of money to “average” taxpayers get into financial or tax trouble. It’s true that the more you make, the more complicated your personal finances and your tax returns become. Sometimes they get so complicated that, I think, people simply give up even trying to understand what’s going on or what they are signing and the next thing you know you’re seeing articles like this one about Johnny Depp in the New York Times. Johnny undoubtedly pays his financial people well for managing his money and preparing his tax returns. And, in my opinion, there’s enough blame to go around on both sides of this issue.
My stance on your tax returns is this: You may forget it by the time you’ve gotten off the elevator, but when you sign your return you will understand what you are signing.
And you can always call and ask me to explain something again. If you are paying a #taxpro, that person should take the time to work with you until you understand what is on your annual tax return before you sign it. You may not need a long appointment every year if your tax situation hasn’t changed much, but if it has and you want to know why and how it affected your tax return I encourage you to ask. Most #taxpros love to educate taxpayers on how our tax system works (or “works”). The level of explanation and understanding a qualified professional can provide is one thing you are paying for when you choose to hire a professional instead of using DIY software. So always choose carefully and know what you’re signing.