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Tax Time
MYTH: You do not need to keep utility statements or records.
FACT: This
could not be more WRONG.
This applies especially if you have moved in the last few years.
The Feds as well as the state tax agencies seem to get real confused when you move and you
could be audited because of the mere fact that you did. It happens, believe me.
So what do they ask for? For the tax period in question they will request a record of all
utility bills (gas, electric, water, phone, etc) as well as school records (if you have
dependants) and of course records regarding rental agreements or mortgage payments. Also
be prepared to supply copies of cancelled checks that apply to all of the above.
Utility companies are hard pressed to get you anything showing you were a customer for
more than the last 12 months and it may take a considerable amount of time to get any kind of
statements from them indicating that you were billed and paid for such services from your
previous address.
MYTH: Tax specialists will be there for you if the IRS finds a problem with your return.
FACT: Tax specialists make big boo-boos also during the crunch and a year or two later, if you are
audited, they won't know you from Adam. Tax services run with a sort of impunity in the business
as all discrepancies are ultimately YOUR problem, not theirs. Unless you have a CPA or
legal tax specialist that you have worked with for a number of years that you know and trust,
you may be taking more chances than it's worth. The more you know about taxes and tax code, the
better you are prepared to answer any questions that may arise years later. If you do rely on
a service to do your taxes, be sure you understand the results and how they were done.
What do I usually do? Visit www.irs.gov and download the PDF versions of the fill-in forms and
publications they offer. Save them to a new file folder called something like "Taxes2002."
Download the shareware version of TaxCut or TurboTax from their respective internet sites and
run the numbers through their programs. You can't actually use the programs to file your taxes
unless you pay a fee but in the process the software may ask you some viable questions to make
you think and help you learn some of the things the IRS wants and deductions you can take.
When it is all done you can bask in the satisfaction that you learned a lot, did it yourself and
can breathe easier for another year.
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Investing
Want to lose your retirement mest-egg Enron style? Then use Putnam Investors, USBancorp or
Morgan Stanley which have proven to be run by some of the worst fund managers. Whether they are managing conservative
or aggressive funds, they continually have proven that they can lose a lot of other people's money even when
the market as a whole shifts upward. The "bait money" I invested with them 8 years ago across a variety of fund
categories has all went south and continues to do so. When the market goes up, they lose your money. When the
market goes down, they REALLY lose your money. After 8 years, all accounts are at about 70% of initial investment.
But if you had invested with them in 2000 you'd be looking at 7% of your initial investments. Neither of these
outfits will ever get another dime from me. Better bets have been funds run by Diversified Investments.
For a real performer, Clipper Funds run by James Gipson has been one of
the best performers in history. It's not easy to buy into as you have to contact them directly, but at least
they are run by a guy who has a lot of insight, knows the markets and is not afraid to redirect when his
intuition tells him to readjust the fund portfolio. All the managers who called Gipson an idiot in the past have
ended up eating crow after subjecting their investors to the train-wrecks Clipper Funds skipped over. Check
ticker symbol CFIMX for further details.
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