“You  know  where you can stick it.” Well, why do we always assume everyone knows where they can stick it? Suppose you don’t know; suppose you’re a new guy. You have absolutely no idea where to stick it. I think there ought to be a government booklet entitled “Where to Stick It.”

Now that I think of it, I believe there is a government booklet like that. They send it to you on April 15th.

— George Carlin, Back in Town

The reality is that we don’t pay taxes. The government takes taxes. You get your check and the taxes are gone. It was not an option.

— Chris Rock, Rock This!

There are enough metaphors, aphorisms, quotations, quips and songs about taxes to choke a horse. It’s not surprising, when you think about it. You worked hard for your money, and once a year you have to sit down and figure out how big of a cut Uncle Sam is going to take. And there is no way of getting around it.

With April 15 approaching, now is the time to take action if you are going to need professional help with your 2008 return. And based on how the year played out both nationally and locally, there is a strong possibility that you will need some professional help this year. You’ll have to decide for yourself if you need help, and how much help you are going to need.

When it comes to finding a professional tax preparer, you have essentially two options. You can use one of the recognized companies like Jackson Hewitt, Liberty Tax Service or H&R Block, or you can find a certified public accountant. There is nothing to say one option is better than the other, and the decision is largely up to you. The important thing is to make sure that you are getting solid advice from someone who is knowledgeable about taxes. Don’t ask your friends or family for help just because they can do their own taxes.

“Don’t get advice from people who aren’t educated in the tax field,” said Gabriele Rojo, a division manager with Jackson Hewitt in Las Vegas. “You wouldn’t ask a doctor to fix your plumbing or a plumber to do brain surgery on you.”

Going Alone

The first decision you have to make is whether or not you need help with your return. This is actually a pretty simple question to answer. If you have any questions at all about your return, whether you think you are missing a deduction or you aren’t sure you qualify for a specific credit or deduction, the safest thing to do is to get help from a competent professional.

“If you don’t have a computer or you’re not comfortable navigating around a computer, I don’t think you should do your own taxes if their time is worth anything to them,” said Robert Brome, a shareholder with Kafoury, Armstrong & Co., a firm of CPAs. “You’ll end up reading the instructions for every line on the return.”

Michelle Maley, general manager of Liberty Tax Service in Las Vegas, offered similar advice, saying anyone who has questions might be second-guessing themselves and should find professional assistance.

Given the tumultuous economic situation in 2008, it is likely that there will be more people who should be looking at professional help with their return. That is because there are tax implications for people facing foreclosures and there are some credits available for people who lost their job and had to look for new employment. Additionally, those looking to take advantage of things like a depressed housing market should also seek help.

“If they know things are going to change in the coming year, maybe they’re planning on buying a house or they are planning on renting out some property, that might be something that is above their head,” Rojo said. “They want to start asking around about what they need and what receipts they will have to save.”

When it comes to finding help, it is always better to look sooner rather than later. If you need help with your 2008 return, it is best to start looking now. As it gets closer to April 15 there will be more and more people seeking assistance. If you can, it is best to try to beat that last-minute rush. And if you’re looking for help with your 2009 return, it is best to start looking for assistance around April 16. You’ll want to know as soon as possible what receipts and what kind of documentation you need to keep.

“I would say that you want to start finding someone as soon as you are done filing,” Rojo said. “You pretty much know what the coming year will be like. You’ve already got it in your mind what you want to do.

“Talk to a preparer and say, ‘I’m thinking about investing in a rental property or buying a house. What changes will that do to my taxes?’”

The other reason to start early is because it can take time to find a preparer with whom you are comfortable. Whoever is doing your taxes has access to some pretty personal information about how much money you make and where you spend it. If you don’t feel comfortable being honest with this person about such topics, you need to keep looking.

“I think what a prudent person does when they select a tax preparer is to interview several,” Brome said. “We’re dealing with people’s finances and we’re privy to information that is very personal. So you really need to find somebody who is competent, but also somebody you are comfortable with and can talk to.”

It is a relationship very similar to one you might have with a doctor. There needs to be a level of familiarity and comfort for the relationship to work.

“That’s what a CPA should bring to the table is an ongoing relationship,” Brome said. “You can call them during the year if you have questions about a specific situation. It is best to get that help or advice before something happens rather than afterward.”

One thing Maley with Liberty Tax suggested people ask about is how to fill out their W4 forms.

“Some people are withholding too much and get a large refund,” she said. “That is their money and they could be living off of that instead of letting the government earn interest on it. Ask a professional to make sure you’re withholding the right amount of money and make updates to your W4 on a yearly basis.”

Tackling Tips and Broken Records

Many people working in Las Vegas and throughout Nevada are in a unique situation of earning a substantial portion of their income from tips. Fortunately, almost all of the major casino companies have tip compliance agreements with the IRS that can simplify the process. You can opt into the tip compliance program and be done with it, but that doesn’t mean that is the best course of action.

Everyone contacted suggested that tipped employees who can enroll in the tip compliance program should do so. But at the same time, they should still keep a daily record of the tips they earned throughout the year. This record needs to be meticulous, and it has to be filled out religiously.

“Keep a daily record to make sure the tip compliance estimation is running at the right amount,” Maley said. “This will help ensure that you are not paying taxes on income that you didn’t earn.

“But you have to keep a daily log and it has to be used for the entire year. You can’t flip-flop back and forth.”

A daily log can come in handy for years like 2008 when revenues were down, visitation was down and it is assumed that tips are down as well. While the tip compliance agreement is based off of the revenue of a property, a drop in revenue might not be as drastic as a drop in tips, and the only way to know this is to record the figures yourself.

“The IRS frowns upon the estimation of numbers,” Rojo said. “They want to know actual numbers.”

Sound record keeping might very well be the most important thing that you can do to prepare for tax season. You need to have records of everything if you want to take deductions or credits.

“If you don’t have a record of it, you’re not going to get a deduction,” Brome said. “Or, if you do take the deduction and you do get examined, the IRS will not allow it.”

And for those who think throwing every receipt from the year into a shoebox is good enough when it comes to keeping records, they can get a nasty surprise when it comes time to prepare their return.

“Most preparers charge based on the amount of time they spend,” Brome said. “It’s a huge mistake to take a box of receipts to a preparer because you’re bound to experience some sticker shock when you get the bill for your tax return.”

In addition to keeping records of tips, those who have been laid off and are looking for work should also keep records of the expenses associated with doing so. While you can’t take a deduction for buying a new suit to wear to an interview, you can take deductions for things like printing or faxing resumes or for traveling to job interviews. And again, without detailed documentation of how much you spent, when you spent it and what you spent it for—along with the receipts to back it up—you’re asking for trouble if you try to take a deduction.

If you have any questions, call a professional. Some, but not all, will answer questions about basic subjects over the phone without making you come in. It is always best to be safe rather than sorry when dealing with the IRS.

“Be cautious that you’re not misreporting anything,” Maley said. “They’re really going after fraud this year, so make sure you have all of the documentation you need and don’t be in such a hurry.”

By Greg Jones

Greg Jones is managing editor of Casino Connection Nevada, as well as associate editor of Global Gaming Business magazine.