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Some bad and good tax advice from the pros

December 19, 2020
Sophocles bad advice quote_quote-coyote

OK, I can't confirm that the Greek dramatist Sophocles said this. But it's on the internet, so…. What is irrefutable is that bad advice is too often given and worse followed, especially when it comes to taxes. (Image by Quote Coyote)

That cheering you hear is, well, everyone as 2020 finally is winding down. This mess of a year can't end too soon for most of us.

But in our enthusiastic anticipation of the Year of COVID-19, we still must get ready for the upcoming tax season.

At the start of the month, I offered some year-end tax moves that all us taxpayers should consider making by Dec. 31.

Now it's time for some advice for the tax professionals whom many of us will turn to file our 2020 tax returns and otherwise help us maneuver the Internal Revenue Code.

AICPA bad and good tax advice: For that important information, I turn to none other than the Association of International Certified Professional Accountants, better known by its acronym AICPA.

And today I turn specifically to the recent guest post by April Walker, a CPA and Lead Manager — Tax Practice & Ethics at AICPA, on the organization's blog. April, aka @Aprilshowerstax, asked her #TaxTwitter colleagues for their advice on getting ready for tax season 2021.

But this being 2020, April noted that she was seeking not real advice. Rather, she wanted wrong and terrible advice dispensed on purpose because for this horrendous year, "we all need some healthy sarcasm in our lives, right?"

Right and right on, April!

April, however, is a responsible tax pro, so she also followed up the errant advice contributions with sound recommendations. And that combination earns her post, titled Do THIS — Not THAT in preparation for the upcoming tax season, this weekend's Saturday Shout Out honors.

Faux form advice: I'll let you enjoy April's post at your leisure. But I've just got to note the bad advice highlighted by Liz Farr (@liz_farr on Twitter) because, even though I'm not a professional tax preparer, I hear it all the time from the ol' blog's readers:

"If you got paid in cash, it doesn't count. If it's not on a 1099, you can leave it off your return."

Wrong, wrong and wrong. You are legally required to report all taxable income, even if you don't get a Form 1099.

Thanks for reiterating that very costly taxpayer misperception Liz and April.

And thanks to all the tax professionals who help us not only correctly complete our 1040 forms and make other necessary tax moves, but also do so with such delightful perspectives.

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Credits/Deductions
Disasters
Family
Filing and Paying Taxes
Politics/Laws
Refunds
State Taxes
Tax Brackets/Inflation
Tax Tips
Comments
  • Ella Starr
    5 years ago Reply

    Thank you for mentioning how important a 1099 is with taxes. My husband and I are thinking of starting a small business this summer. We will find a reputable tax service locally as well.

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