April 15th is just around the corner, and I figured I could help a lot of folks with some tips learned over many years preparing tax returns. I used to do a lot of 'em in my home state of Texas – I even did the accounting for a real famous singer, but I'm not supposed to say his name.
The first thing you gotta be careful of is your filing status. If there's no other people livin' with you, don't try to claim "head of household" status. It doesn't matter how many chickens or pigs you own – even if you let 'em sleep inside the house.
Exemptions: these can be tricky, too. I've had a few clients with child-brides, and I can tell you, the I.R.S. ain't gonna let you check her off as both a spouse and a dependent. I know; I've tried.
I used to deal with a lot of farmers, so I know all about farm income. Take my advice, it doesn't matter how good the numbers look writin' off agricultural losses or expenses – if you're growing something that's not quite legal, DON'T EVEN MENTION IT ON THE RETURN!
Unemployment compensation was another major source of income for many of my clients. Just remember that if the government is sending you the money, and you don't report it all back to the government, that's pretty easy for them to check. Seems so obvious to me in hindsight.
Moving expenses are a potential goldmine. I myself have often had to move – sometimes overnight, without any notice. Most people see one of them "Eviction Notices" on their door, they don't even want to think about it. Save 'em as back up. Some auditor asks why you been crossing so many state lines, all you gotta do is pull these signs out and they'll tell the whole story.
Another adjustment to gross income that gets looked at very closely is alimony paid. They make you list the Social Security number of your ex right there on the form. Like with unemployment, it's real important to get your story straight. And if you think that lyin,' cheatin,' no-good tramp is gonna back you up when you say ya sent her $10,000 a month, well...
Itemized deductions. This was one that really came back to bite my singer friend in the ass. It doesn't matter if you've written songs called "Bloody Mary Morning," "Whiskey River," or "Yesterday's Wine" – don't try to itemize your bar tab as a business deduction!
Deductions remind me of a funny story. This client – the one I'm not supposed to mention – performs with this old, worn-out guitar. Has for years and years. The thing's got holes in it, everybody's written on it. I tried to write off that damage once as depreciation on equipment only to be told by the I.R.S. that all that use made the instrument more valuable. A piece of junk and they were valuing it at hundreds of thousands of dollars. Shows you how much accountants know!
Be sure to double-check your math. Don't forget to carry the one, and if you ever have to divide by seven, break down and buy one of them calculators. Nobody knows how to do that one in their head.
Sign your return. But whatever you do, even if you really are an "outlaw country" musician, don't write that for your occupation. Nothin' with the word "outlaw" in it.
One last thing I learned from my many years doing accounting is that those penalties can be rather sizable This tax stuff is serious business for the I.R.S.; it's practically all they do. I had one client – again, I can't say names – who got zinged real bad and he was able to pay it off by cutting a hit record. But for most folks, that's not an option. Uncle Sam knocks on their door with his hand out, and they gotta be "On The Road Again."
Sooner or later, of course, they catch up to you. But I'm not gonna complain. The slam ain't such a bad place for an accountant at the moment – they're putting millionaires like Martha Stewart behind bars left and right these days. Somebody will have to do these people's taxes when they get out; why shouldn't it be me?
Jimmy Joe Wilburs
Correctional Penitentiary, Austin
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