Here we are, one day before Tax Day 2017—the day by which we must file federal and state tax returns for Tax Year 2017. Hopefully, you’ve rounded up your receipts, figured out allowable deductions and loaded all of that onto the proper tax forms. And if not, it’s not too late. You have time.
But this is not the time to get sloppy. Make sure you don’t run any of these red flags up the flagpole of your tax return and you will greatly reduce the chances of getting hit with the most dreaded of all tax events—the audit.
MESSED UP MATH. Double check to make sure your arithmetic is correct. Math errors are not limited only to miscalculations. They could also be truncated numbers—dropping decimal places. Negative numbers need to have brackets around them. Consider attaching a spreadsheet or adding machine tape. Messed up math is the number one tax filing mistake so double check everything. E-filing makes sure that math calculation errors don’t occur.
Credit Karma’s Simply Free Tax Filing to E-file your federal and state taxes is 100% free!
SLOPPY RECORDS. If you are self-employed your deductions need to be very carefully documented. As a member of this group, don’t be tempted to blur the line between personal and business expenses, especially mileage deductions and home-office usage.
MISSING MILEAGE. Automobile logs are one of the most commonly audited items. If you take this deduction, make sure your records are detailed with a beginning and ending odometer readings, location and reason for the trip.
OVERSTATING CONTRIBUTIONS. Charitable deductions that are more generous than the IRS’ average guidelines could give an auditor reason to pause. Taking deductions for large, non-cash contributions are particularly suspect. Be sure to have all receipts showing the date of donation, the receiving organization and the valuation of the donated items to document these contributions. The workbook, Money For Your Used Clothing Tax Year 2017 contains more than 1,300 market values for common household and clothing donations that do meet IRS guidelines and makes sure you’re spot on with your charitable deductions. It’s the best $20 plus s&h you’ll spend. Take all of the deductions you’re entitled to with confidence and peace of mind.
It’s not too late to get Money For Your Used Clothing Tax Year 2017 but only a few dozen copies remain. Call 1-800 550-3502, 8:30am – 5:00pm Mountain Time. This is the valuable workbook ($20 plus s&h DPL price) you need to complete with information on your donations and then file away with your Tax Year 2017 records. Available while supplies last.
WRONG TAX FIGURES. If you are preparing your own taxes, be sure to pull the correct numbers from the tax tables. E-filing will automatically pull the right numbers, so this is something to consider if you are opting to go it on your own, without an accountant or tax preparation professional.
INCORRECT ID NUMBERS. The most common mistakes, according to the IRS, have to do with Social Security numbers. Make sure they are accurate and match the name(s) given. If you show dependents, you must include their Social Security numbers. Failing to include a dependent’s name and Social Security number can result in underpayment or being denied the Earned Income Credit.
MISSING ATTACHMENTS. Attaching the required documentation, such as W2s and 1099s is critical. All necessary forms and schedules should be included with sequence order given in the upper right-hand corner.
FAILURE TO SIGN. Be sure to sign your return (both spouses, if filing jointly) and make a copy of it and all supporting documents for your records. Remember, being audited isn’t always bad. Sometimes the IRS will discover they owe you money. If you E-File, you will sign your return digitally.
RECEIVING A SIZABLE REFUND. This is not a red flag to signal an audit, but it’s a sign that you’re making a colossal mistake. It means you overpay your taxes. Part of your paycheck goes missing every payday and you need to find it. It’s stupid to overpay your taxes and then find yourself running to the credit cards because you can’t make your paycheck stretch far enough. Fix your withholding. And if you want that big annual refund, automatically deposit the difference to a savings account every payday.
Friday’s Post: Demo Day and Beyond—Starring Instant Pot