From the California Society of Enrolled Agents: Doing Your Taxes? Choices, Choices!

SACRAMENTO, March 15 /PRNewswire-USNewswire/ -- The following release was issued today by the California Society of Enrolled Agents:

(Logo: http://www.newscom.com/cgi-bin/prnh/20050615/CSEALOGO)

"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands." -- Judge Learned Hand.

In attempting to "arrange affairs" to pay the minimum tax for which they are responsible, taxpayers are presented with a variety of choices, including whether to prepare their own return (often using commercial tax software) or hiring a paid tax professional.

"You, the taxpayer, submit your own return, regardless of who prepares it," advises Dave Shaw, EA, President of the California Society of Enrolled Agents. "Whether it's timely, complete, and correct is ultimately your responsibility." Mr. Shaw adds that in many cases, it's impossible to prepare a tax return so that it's completely and unambiguously "correct."

Enrolled Agents are licensed by the Department of the Treasury to advise and represent clients specifically in matters of taxation and to help ensure that all deductions and credits are applied accurately and fairly.

"There is often ambiguity in both the tax law and clients' real-life situations," Mr. Shaw says. "That's why good tax pros and their clients work together to choose the best and most accurate tax return for that particular client, something tax software can't do. If return preparation were unambiguous, no skill would be needed to do one."

One of the decisions faced by taxpayers is whether to itemize deductions or take the standard deduction. Naturally, you want to use the method that gives you the lowest tax. That will depend on how much you spent on qualifying deductions in the previous year; qualifying deductions include mortgage interest, medical care, casualty losses, charitable contributions, and yes, taxes paid.

The standard deduction amounts are based on your filing status and are subject to inflation adjustments each year. For 2009, they are:

• $5,700 for Single
• $11,400 for Married Filing Jointly
• $8,350 for Head of Household
• $5,700 for Married Filing Separately
• $11,400 for Qualifying Widow(er)

The standard deduction amount can vary based on your filing status, age, and other factors. An Enrolled Agent can advise you.

"Even so-called 'minor imperfections' in a tax return could cost you money in missed deductions or unused credits, or could even trigger an audit," Mr. Shaw warns. And what happens if you end up being audited? Only an Enrolled Agent, certified public accountant or attorney can represent a taxpayer before all administrative levels of the IRS for appeals, audits or collections. Most people feel better if they have a licensed preparer to represent them. It's also worth noting that traditionally, tax courts have ruled against filers who tried to blame erroneous returns on the software they used.

You can locate an Enrolled Agent in your area by calling toll free 1-800-TAXPRO-5 or online at www.csea.org. Outside California, the Enrolled Agent referral number is 800/424-4339.

SOURCE California Society of Enrolled Agents