Here we are. It’s tax season again. Many people are looking forward to the changes that President Trump made to the tax laws. Just as many are dreading it. Nonetheless, every year, it is a mandatory opening chapter the lives of almost every American.
Most see this as the time of year the government comes in and takes even more from us than they already have. Some of the lucky few look forward to huge returns. Others are thankful for the two or three hundred they might get back.
However, if you are one of the many that are getting ready to file, there are some things that you should keep in mind. There are three big no-nos when getting ready to do your patriotic duty with taxes.
Don’t Forget to File
As a kid, memories of Christmas, birthday, and allowance money are always special to look upon. Not only was the majority of it free money, we never had to pay taxes on it and if your parents were like most, you didn’t even pay taxes at the store. Be that as it may, we all grow up and eventually have to obey the laws of the adult world.
There are a few instances where you do not need to file your income taxes. The biggest of which is if you made less than the standard deduction plus one exemption. For example, the standard deduction for a single person under the age of 65 is $10,400.
If you made under that and you fit the age bracket, technically, you don’t need to file. If you forget to file by the April 15th deadline, you will immediately accrue a penalty of 5% of whatever you owe and the longer you wait, the higher the fine goes.
Don’t Lie on Your Taxes
Believe it or not, the average income tax return is about $3,000. The majority of us work hard for our money and then file. When that return comes back carrying much less than the $3,000 we expected, it can be very tempting to lie when reporting our income.
With that said, you might not want to be so quick to make that decision. The first and one of the worst things that could happen is that you could be audited. Granted, the chance is relatively low, but it’s not worth taking the chance.
An IRS audit is extensive and can be very expensive. That’s before a judgment is made. If you are found guilty of tax fraud, you could end up with hefty fines and jail time. Planning on buying a house or car in the future? Then don’t fudge on your income.
If creditors believe you have a lower income than what you actually have, they may deny you credit based on the belief that you don’t make enough to pay it back.
Don’t Be Without A Great Lawyer
Alas, there are times we just can’t seem to get out of the way of trouble. Did you know that the law can find you guilty of what they call ‘willful ignorance?’ With rules like that hanging around, someone is bound to get caught in the web of tax law even if it is accidental.
With that in mind, another thing you should never do, considering taxes, is to be without a great tax lawyer. There is simply too much information for the average Joe to keep up with (most of wouldn’t want to anyway.)
Having a lawyer on standby that not only knows his/her way around a courtroom but also has detailed knowledge of the tax laws is just plain common sense.
Tax season is upon us. Refer to this article as needed for that extra bit of motivation to keep things on the up and up when you file this year.