Thanks once again to the relatively unknown Emancipation Day federal holiday on April 16, we again get extra time for federal tax preparation, but April 17 is still fast approaching. Here are a few thoughts to get you through what could be an anxiety-ridden couple of weeks.
1. Avoid foolish mistakes. Sometimes waiting until the last minute can result in making some mistakes you never would have made otherwise. For example, in the case of paper federal tax preparation, be sure you and your spouse sign your tax return, attach any supporting documents, include a check if needed, use the right mailing address for the IRS, and apply appropriate postage to the envelope.
2. Avoid audit red flags. Keep in mind that the burden of proof in an IRS examination is on you. You will have to properly show that your deductions are legitimate. Don’t estimate deductions! And, don’t forget that the IRS can use whatever means they want to find you haven’t reported income, and yes that includes you bragging on social media about a windfall that you didn’t report. If you don’t report something that you should have, you can be pretty sure you’ll get a letter, and you could end up being audited, as well.
3. Be careful not to get too creative with deductions. There are plenty of legitimate tax deductions and credits, so don’t mess with the ones your hairdresser’s best friend’s father’s doctor told you about. We promise– your pets are not legitimate dependents!
The best way to avoid foolish mistakes, avoid audit red flags, and get the most deductions (real ones!) is to call a federal tax preparation professional. Here at Cathy E. Parker, E.A. Bookkeeping & Tax Service, we help take that last-minute anxiety away by preparing your taxes properly. If things really are a mess and hitting that deadline doesn’t look good, we’ll compute your estimated tax liability and prepare an extension form for you. This will give you up to October 15 to file.