ByJason Collum, AFA Journal staff writer
April 2003 – Putting off paying taxes – or even figuring taxes – for 2002 is no longer an option. April 15 looms large.
While it might be too late to do many things in order to reduce a person’s tax burden for 2002, it’s a really good time to be thinking about 2003. It’s also a really good time for younger people to be thinking beyond 2003 all the way to retirement.
For those waiting until the last minute to file, it’s a good idea to keep a few things in mind while rushing to complete the paperwork. Errors on tax returns can cause headaches down the road.
The most common error people make in preparing their taxes each year is miscalculating earned income credits. These credits apply to those in lower income brackets with dependents. The next most common errors, according to the Internal Revenue Service, are getting social security numbers wrong (most commonly the numbers belonging to dependent children) and simply making mathematical errors.
Those choosing to handle tax preparation themselves have a number of computer software options to aid them in making the process easier. The most popular software applications are TurboTax, Quicken, and Microsoft Money.
“Personally, I feel a person is better off going to a paid preparer,” said Eddie Powell of the AFA Foundation.
Accountants aren’t only good for preparing tax returns, though.
“Another thing an accountant can help you with is planning,” Powell said. “If a person sees the same accountant year to year, the accountant can know that person better and help him plan financially.”
Financial planning doesn’t just include finding ways to reduce tax burdens from year to year; it encompasses planning for virtually every financial area of life, from paying for children’s college to funding life after retirement. All clichés aside, it’s never too early to plan for retirement or any number of other life situations. In fact, it might not be too late to take advantage of one form of planning that will also reduce the 2002 tax burden.
“Contributions to retirement plans and IRAs (individual retirement accounts) can be made for the previous year until April 15, Powell said, but that option expires April 15 or whenever 2002’s tax return is filed, whichever comes first.
Practicing good stewardship
It should be every Christian’s goal to handle his or her money the best way possible. The Bible isn’t silent on money. In fact, we are called to be good stewards of what God has given us, whether it be $20,000 or $20,000,000.
The AFA Foundation exists to promote Christian stewardship, and to teach people how to be the best stewards of their money. While the foundation doesn’t provide accounting services, it does aid people in making the best possible plans for spending their financial gifts.
“We also provide some technical advice in charitable giving, and how to maximize giving potential through whatever types of tax benefits are available,” Powell said.
Some who could benefit from the tax benefits of charitable giving may fail to do so, believing they need to be of a certain wealthy background.
“You don’t have to be rich to give a gift,” Powell said. “We have a charitable gift annuity that has a minimum of $5,000,” Powell said. “In return for that the person gets an annuity, which is a stream of income for life. So, you really get to give it away and keep it, too.”
For people in their 30s, 40s or 50s in the middle- to high-income range with elderly parents who are hurting because of recent drops in the stock market, the annuity could be an attractive option.
“The children can give the parents the charitable gift annuity,” Powell said. “The children need the tax deduction worse than the parents. And, the annuity rate is based on the age of the annuitant. Essentially, the children can give their parents a higher income and get the charitable tax deduction for themselves.”
AFA Foundation also assists people in estate planning. For more information, call (662) 844-7370. 
