Tax Day is Right Around the Corner, so Here Are Four Ways to Stay Out of Trouble With the IRS
It’s that dreaded time of year – tax day is April 15, and for millions of Americans that means sending a big fat check to the IRS.
And while nobody enjoys writing a check to the government… it could be a lot worse. Specifically, if you find yourself facing an IRS dispute, you could be in jeopardy of losing your business, your car, and even your home to the IRS. The IRS is a brutal and efficient collections agency, and once they latch on to a taxpayer, it’s not easy to get them to let go.
That’s why the best course of action is to avoid IRS trouble in the first place. Since tax returns are due this month, we thought it would be a good time to review four important steps to keep you out of trouble with the IRS.
1) Report your income accurately. It’s very tempting to under-report income to the IRS in order to lower your tax bill. But the risks aren’t worth the reward – should the IRS figure out what you’re doing, the penalties and interest you will face may be enough to force you into bankruptcy.
2) File on time, and avoid simple errors. File your returns and pay your taxes on time to avoid extra scrutiny. In addition, double check your math to ensure that you haven’t made any mistakes that could cause the IRS to take a closer look at your return.
3) Don’t claim excessive deductions unless you can document them. If you claim a higher amount of deductions or tax credits than average, the IRS is more likely to examine your return. That doesn’t mean that you shouldn’t claim everything you are entitled to… but it means that you should be prepared to offer proof when the IRS asks.
4) Unless your tax returns are extremely simple, seek professional guidance. Professionals can help you spot mistakes and red flags that could otherwise lead to a dispute with the IRS. We highly recommend that you work with a professional while preparing your returns – contact us today to learn more!
An IRS dispute can be stressful, time consuming, and expensive. Keep these four tips in mind as you prepare your taxes and you’ll have a better chance of avoiding an IRS dispute to begin with. Of course, if it’s too late and you do find yourself stuck in an IRS controversy, we can help. Contact us today to learn more!