The American government is on the lookout for tax problems by evaluating and doing tax audits on suspicious looking claims for those who were misfiling instead of searching for legitimate tax relief. This is due to the economic downturn on our economy and being cash-strapped. Be sure you are doing your tax filing legally because there is a low thresh-hold and intolerance for illegal activity on tax filing. There is a fine line between tax maneuvers and illegal activity on tax. People are going to jail now for tax evasion which is another chapter in this tax problem book.
The first to note: Snail mail is long gone for the most part these days. The IRS is on the lookout for hand written tax returns. Due to the technology available and human calculations not really being needed. The technology will produce no errors as long as the data is input correctly. The software does the rest of the work.
Second to note: Do not try to play the system. If you work for one or more companies throughout the year, your taxes will come from a W-2 form that you report from and are straight forward. No worries there. Self-employed workers, food beverage service workers, seasonal workers and newly self-started businesses have more to keep track off. Then you are dealing with 1099 forms that were filed and perhaps you didn’t report it or vice versa. The classifications for this style of workers are considered more self-indulging workers. They are in charge of their income. They are more prone to errors as well when reporting income. There is also a temptation to filing incorrectly due to various reasons. Just be careful.
Thirdly: Don’t claim credits that aren’t warranted. One of the biggies is the Earned Income Tax Credit (EITC). The IRS looks for people who take this EITC and they are deducting items. This is a dead giveaway that you would not be taking the EITC and donating all sorts of items. This EITC is designed for low income folks who do not have a lot in terms of financial and items.
Fourth: You must file a Schedule E to report depreciation losses on your rental house. Only real estate professionals can report depreciation on their individual tax returns.
Fifth to note: Do not assume your small business is too small for an audit. Make sure you are filing Schedule C with your return. IRS looks for businesses with incomes of more than $100,000.00.
To learn more about tax relief for common problems that filers fail or filers are missing, Consult appropriate attorneys online. For small businesses and other filers that feel they could capitalize on their taxes, select three attorneys that you might like to hire, do a thorough research on each.
To find out more about tax relief, please visit Robertwagnertax.com. to start your research for a tax attorney.