We’ve officially entered the tax filing season. The IRS offers a lot of excellent information online at http://www.IRS.gov to help you get your 1040 filed accurately and on time. That said, there are 3 things the IRS won’t tell you.
- It can be risky to “go it alone.” The tax code is so complicated these days, it’s often wise to hire a tax preparer to help you. This is especially true if you have lots of stock transactions, are self employed or run a side business. There are also some good software tax preparation packages available and some are now online as well.
- It doesn’t matter how much or how little your income, you could be audited. The number of audits has been down in recent years, but being a low income earner doesn’t mean you won’t be audited. It is especially important to keep receipts for charitable donations, because the IRS flags returns with a lot of deductions for giving.
- The IRS benefits from our anxiety. People often fear making a mistake, so they overpay on purpose. A few years ago, the Government Accountability Office found that over 2 million people overpay each year by an average of nearly $500. That’s almost a billion dollars a year in overpayments?
So, consider getting help unless you’re very good at preparing your taxes. It’s not just about being audited. A tax professional might save you a lot of money by catching deductions and credits that you may miss.
And don’t forget, the Bible encourages us to pay all the taxes we owe. So, always be completely honest when reporting your income and tax deductions.