With the year coming to an end, many taxpayers are excited at the prospect of receiving their tax refunds from the Internal Revenue Service.
Below are some things that one should not have on their return list.
A gambling loss deduction always draws the attention of the IRS and brings audit notices.
Many Americans win one lottery or the other, slot machine bonuses, or some other prizes, and erroneously deduct everything they incurred as loss in gambling.
The rules on record keeping are very tight for losses made in gambling and gambling losses should, therefore, be carefully reviewed before being considered for tax deductions.
A gambler is advised against filing for gambling loss deductions unless he/she has a very detailed record of the date, time, location and the amount of every gambling activity.
Tax payers need to find qualified accountants to advise them on how to best file their returns.
Unqualified tax preparers have caused many innocent taxpayers to be subjected to the rigorous IRS audit process.
The IRS has recognized this problem and as a result, has set up licensing and education requirements for all tax preparers.
According to the IRS, more than 100,000 tax preparers failed in their bid to qualify for licensing in 2011.
It is always advisable to ask for a practicing license before hiring a tax preparer.
The preparer is supposed to be certified in public accountancy, which means they should either be a CPA (Certified Public Accountant), an IRS Enrolled Agent (EA), or a Registered Tax Preparer (RTP) - expected to come in force in 2012.
The IRS requires all tax preparers to attend tax updates for, at least two days, every year.
Tax payers need to avoid unreported incomes, or losses from supposedly small businesses.
The IRS views such businesses with suspicion, as, often times, many people use them to attempt cheating the taxman out of taxes.
People with high incomes need to be very honest in their tax dealings.
This is because high incomes usually call for increased audit exercises by the IRS.
Statistics reveal that high-earning Americans with more than $100,000 of annual income are nearly twice as likely to face IRS audits when compared with those who have incomes of less than 100,000 per annum.
It is important for a taxpayer to apply good planning on his/her taxes so as to avoid filing for deductions from one's tax returns, since this always attracts the IRS's attention.
Below are some things that one should not have on their return list.
A gambling loss deduction always draws the attention of the IRS and brings audit notices.
Many Americans win one lottery or the other, slot machine bonuses, or some other prizes, and erroneously deduct everything they incurred as loss in gambling.
The rules on record keeping are very tight for losses made in gambling and gambling losses should, therefore, be carefully reviewed before being considered for tax deductions.
A gambler is advised against filing for gambling loss deductions unless he/she has a very detailed record of the date, time, location and the amount of every gambling activity.
Tax payers need to find qualified accountants to advise them on how to best file their returns.
Unqualified tax preparers have caused many innocent taxpayers to be subjected to the rigorous IRS audit process.
The IRS has recognized this problem and as a result, has set up licensing and education requirements for all tax preparers.
According to the IRS, more than 100,000 tax preparers failed in their bid to qualify for licensing in 2011.
It is always advisable to ask for a practicing license before hiring a tax preparer.
The preparer is supposed to be certified in public accountancy, which means they should either be a CPA (Certified Public Accountant), an IRS Enrolled Agent (EA), or a Registered Tax Preparer (RTP) - expected to come in force in 2012.
The IRS requires all tax preparers to attend tax updates for, at least two days, every year.
Tax payers need to avoid unreported incomes, or losses from supposedly small businesses.
The IRS views such businesses with suspicion, as, often times, many people use them to attempt cheating the taxman out of taxes.
People with high incomes need to be very honest in their tax dealings.
This is because high incomes usually call for increased audit exercises by the IRS.
Statistics reveal that high-earning Americans with more than $100,000 of annual income are nearly twice as likely to face IRS audits when compared with those who have incomes of less than 100,000 per annum.
It is important for a taxpayer to apply good planning on his/her taxes so as to avoid filing for deductions from one's tax returns, since this always attracts the IRS's attention.