It sounded so good. . . The promise of a large tax refund can be very seductive. But like anything that seems too good there is usually a catch. During my time with the IRS we would look for large tax returns that could be audited. So what can you do to make sure your tax refund doesn't turn into a tax debt?
Simple mistakes. . . There are a few common deductions and credits that get people into trouble when they file them on their tax return. I would like to go over a few of the most common ones with you to make sure you can avoid the common mistakes far too many Americans make.
Child tax credit: This is one of the most common. There are a couple of requirements that you have to meet and prove to the IRS before you can claim a child as a dependent. First the child must be related to you in some way, or you are the child's legal guardian. Second you must prove that you took care of the child for six months of the tax year in question.
Charitable Donations: When I talk about charitable donations I'm not talking about the clothes you donated to the thrift store. I'm talking about big donations. If you've made a charitable donation of more than $500.00 you have to not only have a receipt, you have to have a signed document from the organization that you donated to proving that your donation was legitimate.
Business Deductions: This one trips up the small and independent business owners all the time. The IRS is picky about what is considered a business expense and what is personal. If you're buying equipment or office furniture make sure to keep the receipts. You also have to prove that the purchases are important to the running of the business. For example, buying extra computers for a growing staff is a legitimate write off. However purchasing an antique desk for your office because it impresses clients is considered a luxury and does not qualify as a business expense.
The same holds true for travel expenses. Again, not only do you need your receipts you need to prove that the travel expenses are for business purposes only!
And that's not all. . . I want to make you aware that these are only a few examples of potential deductions or credits that can turn a tax refund into a tax debt. When trying to claim any deduction or credit always make sure that you have receipts and other documentation to back up your tax return. And use common sense; if you have any doubt about claiming something; do the research and make sure before you send in your tax return.
Now you have the smoking gun. . . Use it!
Richard Close was an IRS-Hitman. He was a revenue officer who took out anyone that owed the IRS money. He left that behind and now helps thousands of Americans beat Uncle Sam and save thousands of dollars. The IRS-Hitman can help you with your tax debt problems. He offers free advice and tips on removing wage garnishments and bank levies; and arms you with the skills to slash your tax debt: Visit at: http://irs-hitman.blogspot.com or http://www.taxdefensenetwork.com or contact: email firstname.lastname@example.org or 1-888-248-9058.