Four things you need to know to avoid a tax audit

Yes, I'll confess I've had taxes on my mind quite a bit lately. It's been a good year so far. I can't help but be a little concerned that estimated payments and withholding will be enough to keep me out of the penalty box. I'm also fairly diligent about our record keeping. I can't help but think that some of our financial ratios border on the extreme, and we all know it's the ratios the IRS looks at when deciding who to invite in for an audit.

If you've ever been through an audit you'll agree that any time of year is a good time to think about taxes too. If you've been audited recently you're probably thinking about them all year 'round. Spending a little time assessing your tax situation right now can alert you to potential problems while there is still time to correct them and avoid a trip to the auditor.

You've seen me write before about the power of networking - what a good network can do for you, and why creating of a broad and deep network for yourself not only pays dividends for you, but for all who participate. I thought today I'd illustrate just how powerful and profitable a personal network can be by using a real life example.

One of the non-profits in a nearby municipality recently held a fund raising event. It was one of those trivia night parties. They're tremendously fun. Everyone enjoys trivia; and in this format you're playing along with a table of your friends as a team against all the other tables in the room. Each table is its own little party, so inevitably, everyone has a great time. Trivia nights are also great fund raisers. A creative promoter can utilize any of dozens of opportunities - games within the games - to extract a few extra dollars from players.

I was one of the players at this particular event. Unfortunately for the beneficiary and all the players that night, the event largely fell flat on its face. The organizers clearly had heard that trivia nights were good fund raising vehicles, but they had not the slightest clue how to run one effectively. The evening ended with a whimper. There were plenty of polite smiles, but not much excitement and enthusiasm for "next time". Here's where I sensed an opportunity.

A while back I went on about how volunteering was a great way to invest in your own self. [see Investing in yourself by giving back] One aspect I didn't cover in that article was that there are real, tangible, benefits to volunteering. Tangible, as in things you can touch and even put in your pocket. Things like nickels and dimes. Dollars even.

Yes, hard currency.

You can reap monetary benefits from your volunteer activities. Every mile you drive your car doing volunteer work is tax deductible:

Charitable services. The standard mileage rate allowed for use of your car when you use your car to provide charitable services to a charitable organization is 14 cents a mile.

So add that to the list of benefits, or return on your "give something back" investment.

• You get that good feeling that only donating your time and energies can bring
• You get opportunities to find your passion and develop skills to help you pursue it
• It's a great networking opportunity
• While your time isn't deductible, your mileage is

I wanted to extend my theme from the other day about investing in one's own self. The one I wrote about previously was one of those short-term investment type things. It was good advice for curing the short term blahs life sends your way. Sometimes you have to even out the road a bit.

Today I thought I'd mention a longer term kind of investing in your own self. This is the kind of investment that pays dividends not only at the time of investment, but also for days and weeks and even years to come. I'm talking about volunteering.

We all have something we're good at. Most of us have multiple things we're better than average at. And face it, we all have at least some time we could spend doing a little good for someone else.

If you've never volunteered your time for a good cause make it a point to do it soon. Yeah I know, it's hard to imagine anyone not having done this; but I'm sure it happens. Do it. You'll feel good about yourself.