The word “audit” can send shivers up and down the spines of many people.
Yes, a letter or other form of notification from the Internal Revenue Service (IRS) can be quite scary, but that does not have to be the case.
By properly documenting your receipts during the year, then properly filing your tax return at tax time, you can likely avoid any issues with the government, the key term being likely.
So, are your tax papers just the way you want them and already filed? Or is the April 15 deadline to file just wishful thinking on your part?
Organization Key to Tax Return Balance
In order to sidestep any problems with the IRS, it is imperative that tax filers do the following:
- Be organized – Your first matter of business is making sure you stay organized throughout the year. Throwing your receipts and papers around during the year, then expecting to pull everything together a week or two before April 15, serves up a recipe for disaster. You can just as easily record the information on your computer, keeping it all nice and organized. When you go to do your taxes, you will have all the information sitting there for you. One word of advice; be sure to have paper copies or a backup disc in the event your computer gives you problems when you go to download the information. Also save the right receipts, as only some purchases, trips etc. will be deductible;
- Be honest – Okay, you’re not going to be able to deduct that $200 “client” dinner that you and your family had, that is even though you mentioned the word “client” once during the evening. Being honest about what legit deductions are and what they are not is the best course to take. What typically draws the eyes of the IRS is if some deductions seem over the top, so keep them as real as possible. If you run a home business, you are of course allowed to deduct certain items. That said do not go overboard and try to deduct your dog or cat because they somehow “helped you” in getting your work done ;
- Get help when needed – Despite your best efforts to file everything accordingly, there may come a time when you need legal representation on your side. In such cases, having one of the New York tax lawyers or those closer to home, certainly makes sense. Such individuals can assist you with not only your legal questions, but helping you present a compelling case to the IRS or others. In looking for the right tax lawyer, vet each and every one of them before making a choice. Getting into how long they have been in business, what level of success they’ve had for clients and their costs are all items of utmost interest to you;
- Prepare for next year’s filing – Okay, you just got through filing your taxes for 2015 and you need a break. If that is the case, make it a short break. Starting now on your 2016 records will give you a leg up come next spring. This way you’re not scrambling at the last hour to find and record all the necessary information. Another advantage to getting a jump on them early is that you will have time available if you need to find the money to pay. Much to the shock of many consumers, they find out at the last minute that they owe the federal or state governments hundreds or even thousands of dollars. When this happens, they oftentimes do not have the financial resources available to come up with such funds in a short period of time. By doing your taxes a few months ahead of time, you can determine if you will need to come up with a sizable amount of funds to pay the IRS and/or contribute more money into an IRA to bring down your tax burden.
Doing one’s taxes can seem like a never-ending chore, but getting them behind you is one of life’s great feelings (especially if a refund is involved).
Prepare your return early and properly, likely allowing you to avoid the hassles of dealing with the IRS.