A brush with the IRS is not a good way to handle. That being said, most of us want to avoid the stressful and traumatic experience of interacting with the IRS. We ensure that all our tax returns are paid and filed on time. To that extent, we cover our backs with the help of technology like a mile estimator app. Despite these efforts, the IRS can always flag you for an audit. In this event, what do you do to ensure that this encounter goes as smooth as possible?
Make Wise Tax Decisions
The tax decisions you make may influence whether or not you get flagged for an audit. While you may be entitled to some deductions, it is important that you take those which you are rightfully entitled to. By doing so, you can easily account for these tax position when the IRS comes knocking on your door.
Keep it Simple and to the Point
When filing tax returns, you are often tempted to explain in detail your sources of income. It is not a surprise, therefore, to have sale or settlement agreements when filing the returns. Keep your returns simple, truthful and to the point and provide the extra information only when it is required of you. Forms 8275 and 8275-R are available whenever extra information is required. Be sure to ask a professional to help you when filling the latter and should the need ever arise.
Pay Attention to the Process
It is common to delegate filing of taxes to the last minute category of your to-do list. The trouble with this practice is that we often make numerous errors. The last-minute rush does not accord us enough patience to pay attention to the details of the tax return process. Simple errors that occur due to little attention paid when doing the calculations will cause a big problem in the future. Whenever you find yourself in a situation that predisposes you to arithmetic errors, it is best to use software to do your returns.
Remember Forms 1099
These come in many forms. There exist forms 1099 for interest, dividends, tax refunds, pensions, and other miscellaneous sources of income. These must all be accounted for. Forms 1098 are helpful when accounting for interest paid to lenders. You need to counter check that you have all relevant versions of these forms before submitting your returns.
Seek Professional Help
Filing tax returns is much easier today than it has ever been. You can take advantage of software and mile estimator app that exist in the market to make filing tax returns and deductions an easy and a time-effective process. This, however, does not make tax experts obsolete. It is prudent to have an expert look through your returns in case of any numbers that do not quite add up or the existence of mistakes commonly made by a layman. The results of the software may also cause you to be aware of tax issues that you previously did not know. Whatever the case, seek a professional opinion on your taxes to avoid the risk of being audited in future.
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