Saturday, October 22, 2011

Did you over pay your taxes?

I was recently at a client's office preparing an interim Profit & Loss report for them as they are trying to purchase a new home.  As I was reviewing their expenditures this year, I cam across a large check to the IRS for last year's taxes.  The final number on last year's P&L was way too small to have resulted in a tax due that large.

So I yelled over to my clients (who were sitting just a few feet away), "Holy crap!  How on earth did you owe this much tax for 2010?"

Since he and his wife hand everything over to their CPA for preparation of their taxes, his wife jumped right up to look through their files to find their copy of last year's 1040.

She handed it to me to review and within a few seconds I had spotted a glaring error that resulted in a large overstatement of revenue thus a much larger tax liability.

So, I printed out the documentation to prove this to the CPA and my client sent off an email right away requesting he amend their returns (state also) ASAP.

Between the IRS and the State, they will probably see a total refund come back of around $15K.

So, if you have your tax returns prepared by someone, do you review them?  Mistakes can be made, even by the best.  Humans make mistakes.



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