By: Steven Klitzner
Nobody wants the IRS knocking at the door, because once you're flagged by the IRS folks, it's very difficult to get them out of your life. Most people know this already, which is why the very utterance of the word "audit" causes chills (and perhaps even slight nausea).
Individual and small business tax filers can do themselves a huge favor (and decrease the odds of an audit) by claiming tax deductions smartly and honestly.
You should first and foremost make sure ALL your information is correct and consistent, especially-especially--if you are married and filing a separate return from your spouse (the IRS looks closely at returns filed separately by married couples, because there are more likely to be consistency errors between two returns than one).
If you are a business owner, no matter how small the business, it's advisable to seek professional tax preparation assistance. Today, more so than at any other time, small business owners are being placed under greater scrutiny. So, it's best not to accidentally create a reason for one of the IRS's disruptive mail or face-to-face audits.
Regardless of who prepares your taxes, double, triple and quadruple check your information before signing off on it. Simple errors like transposed numbers or differences in the numbers reported on your tax return and W-2 or 1099 forms can generally be caught in the review stage.
You should also remember to use common sense when claiming deductions for charitable giving. Don't indicate that you donated half a million dollars to the Save the Red Panda fund if your income is only $30,000. Deductions for charitable donations in and of themselves don't raise suspicion-it's only when the donation claimed seems excessive considering your take-home income. If your donation was "time," and you're placing an hourly rate on it, make sure you have a letter from the charity stating how many hours you donated, how the hours were valued and how the IRS may contact them with any questions.
You should always, always keep records of all charitable giving. Save letters and check stubs that prove you gave what you said you did.
And, finally, don't get greedy claiming home office deductions, especially if your home business generates substantially less in financial returns than expenses.
You should also make sure that your home office is exclusively a home office, not a part-time gym, game room or guest room. The IRS is very strict about making sure business write-offs are for business purposes. Folks who claim home office deductions will automatically have their returns more closely examined, so make sure that if you are claiming home office deductions, you can account for ALL your claims. Because an IRS agent just may ask.
The bottom line is to be accurate and honest when filing your taxes. Don't think you can get away with claiming excessive deductions or any other type of "cheating" the system. Besides, you can't put a price tag on peace of mind, which comes from doing what's right.
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Steven Klitzner from Florida Tax Solvers is a qualified tax attorney who specializes in helping people with their tax debt relief. His experience working with the IRS on a regular basis has given him the knowledge to advise on tax problem resolution services, including audit representation and wage garnishment. Visit http://www.floridataxsolvers.com for more information.
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