Monthly Archives: March 2013

Before You File Your 2012 Income Taxes….

Here are some common Tax increaseIRS Audit Flags you might consider:
1. Return has too many zeroes: Rounding numbers to the nearest dollar is okay, however, not to the nearest thousand, especially when itemizing deductions.

2. Forgot some income: For any miscellaneous income over $600 you received from one Employer/Client in the year, you should receive a Form 1099. If not, request it or simply report the income without the form.

3. Questionable deductions: If you know it’s a stretch, it just isn’t worth the risk.

4. Work-related Driving: Deduct gas costs only if the driving was for business purposes (56.5 Cents/mile).
—–Deduct Mileage related to supporting a Charitable Organization @ 14 Cents/mile.
—–Deduct Mileage for Medical or Moving purposes @ 24 Cents/mile.

5. Exaggerate Donations: High charitable contributions relative to your income unfortunately should have the proof to back it up. Use https://itsdeductibleonline.intuit.com/ to help value items.

6. An Unprofitable Business: The rule is that you must have a profit in two out of five years. If you don’t, the IRS may consider it as a hobby.

7. Fishy Tax Preparer: Deductions that sound too good to be true, not asking for documentation for expenses or deductions, and tax preparers who calculate their fees as a portion of a taxpayer’s refund could put you at risk.

Need help organizing your financial data for Tax Filing?  Call 805-433-3577  or Email MJB’s Bookkeeping Solutions today.

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