Alimony Mis-match Getting IRS Audit Attention If the alimony you paid does not match the alimony income reported by the person who received the funds you can expect more attention from the IRS. A lot more attention. Here is what is happening. The U.S. Treasury Department recently released an audit report revealing a disturbing level of non-compliance in alimony reporting on tax returns. This non-compliance will result in a vast …Read More
Save Those Receipts and Documentation! – A little organization now can save money during an audit Too often during the course of an audit, the auditor throws out valid deductions. Not because they did not occur, but soley because you did not provide adequate documentation. Here are ideas to help solve this problem. When it comes to taking qualified deductions on your Federal Tax return three things must happen. First, …Read More
Understanding Your Special K’s – 1099-Ks are now being subject to underreporting IRS audits The IRS recently announced it is going to conduct automated audits of 1099-K filings against business income. This includes unicorporatated small businesses filing Schedule C with their Form 1040. How do you protect yourself from this audit risk? For the first time, the IRS is reporting that it will be comparing filed 1099-Ks against income reported …Read More
Determining the value of items on your tax return is always open to interpretation. You do not want that to happen to you during an audit as it can lead to additional tax and penalties. Here are some tips to help defend your Fair Market Value (FMV) determinations. “Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would …Read More
What you need to know to ensure your allowable business, charitable and medical miles are not dismissed during an audit. The tax code allows deductions for qualified miles driven for business, medical, moving and charitable purposes. But to claim this deduction you must keep adequate records of actual miles driven. During an audit this is an often disallowed deduction, despite the fact that you actually drove the distance claimed. How …Read More
Often the #1 target of IRS audits, sole proprietors need to be prepared with good records. Here are some tips. Each year the IRS publishes their activities in a publication called the Data Book. And each year for the past number of years the number one target of audits are those tax returns with a Schedule C for small business activity. So how to prepare yourself for a possible audit? …Read More
With a sigh you are relieved that yet another tax return has been sent off to the government. Another 12 months before you need to do this again. But before you close that tax file, there is still some work to do. If the IRS or state revenue department selects your return for review, you will need to be prepared. Here is what you need to know: Record Keeping Tips …Read More
Avoid Common Tax Filing Mistakes Want to ensure your refund gets to you in the shortest amount of time? Want to avoid a letter from the IRS? Here are some of the most common Tax Filing Mistakes: Forgetting a W-2… With the backlog of tax return filing due to late changing tax laws, want to ensure your refund gets to you in the shortest amount of time? More importantly, how …Read More
Very few banks return your cancelled checks. So what do you need to do if required by the IRS to prove your deductions? Often this means staying ahead of the game at year-end. Year-end is a good time to ensure you have proper documentation to substantiate your tax deductions. This is important as many banks start deleting online documentation that is over one year old. Background Two things have happened …Read More