As tax season rolls in, it is crucial to be vigilant about the mistakes you may make on your returns. In doing so, you can avoid audits and their consequences. While some errors might seem insignificant, they could create serious issues for you financially and emotionally. Here are a few common silly mistakes that may lead to an audit:
Wrong Social Security Number (SSN)
This is the biggest mistake that many people make while filling out their tax returns. If you provide the wrong SSN, your income won’t match the expected amount, leading the IRS to notice something amiss. It might sound too ridiculous to occur, but it is one of the most frequent errors found in tax returns.
Neglecting Math Checks
Even with tax preparation software, you still input data manually, such as adding up your deductions in a single category. If you overlook this step, it could result in a simple mistake that can trigger an audit and cause stress, time, and financial issues. Double-checking all calculations is essential.
Hiring Questionable Tax Preparers
Be cautious when choosing a tax preparer, as some might lure you with promises of higher returns. However, this could indicate they are pushing the legal boundaries or making false claims about your deductions. Stick to a professional who knows your legitimate deduction options and helps you claim them.
Talking About Your Tax Return
Keep mum about your tax return; it is no one’s business except yours. The IRS has confidential informants who are rewarded for providing information that results in recovered funds. Don’t give anyone an opportunity to use your tax details against you.
Fudging Deductions
Although charitable donations are great, making them up or exaggerating the amount can lead to trouble. Always be truthful on your tax return and avoid taking creative liberties with your deductions.
Guessing Income
When calculating income such as investments, dividends, and other unearned income, don’t take a guess. If you do, it is likely to result in incorrect calculations that may trigger an audit.
Claiming Hobbies as Businesses
For self-employed individuals, claiming a hobby as a business can land you in hot water with the IRS. Your hobby must be making money for it to be considered a business. The IRS allows for some losses when starting out but will not allow unrealistic claims.
Lastly, always keep an eye out for other mistakes that might have been overlooked so that you can address them in your tax returns. By being diligent and avoiding these common errors, you can significantly reduce the chances of getting audited.
Disclaimer
While we endeavor to keep information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Please note that Bullsevevergreen.com an all its pages and content is intended primarily as an informational platform and not a financial advisor, planner or brokerage firm. The content on our website should not be considered as personalized investment advice for any individual's specific circumstances. Any information provided by us does not constitute professional advice, nor does it take into account your personal financial situation, goals, and needs.
Investing in the market involves risks including potential loss of principal invested. The strategies discussed on our site are based on historical data; past performance is no guarantee of future results. Before making any investment decisions, we encourage you to seek independent professional advice tailored to your financial needs and objectives.
By using Bullsevevergreen.com and its resources, you agree that the information provided does not create a client-broker relationship between us or our affiliates and yourself. We do not provide investment recommendations nor endorse any particular securities, funds, or strategies. Always conduct your due diligence before making investment decisions based on content from Bullsevevergreen.com.