We all make mistakes. But the IRS needs to differentiate between the people making mistakes and those who’re attempting to steal money from them. This is why they heavily audit anyone who’s suspected of potentially cheating the system.
Here are some of the tax mistakes that can lead to major tax problems going forward.
Reporting the Wrong Amount
This can happen for two reasons.
- You report the wrong amount by entering the wrong number into your tax return.
- You make deductions from the final amount when you didn’t have the right to make these deductions.
It can come back to haunt you later because the IRS will use the updated figure to calculate how much you owe. That means you will have to make an unexpected payment, which you might not be able to handle.
Making the Wrong Deductions
The system of deductions allows companies and individuals to write off part of their tax bill. This is perfectly normal procedure. Nevertheless, when you deduct too much the IRS raises its suspicions. It is a common scam for people to deduct more than they’re allowed in the hope that they won’t get audited.
The Wrong Social Security Number
A simple mistake like adding in the wrong social security number can cause real problems. This is because the wrong social security number is what criminals use to submit tax returns on behalf of strangers. They attempt to claim the refunds and then they disappear off the face of the earth.
The IRS is wise to this scam, so entering the wrong number is a big no-no.
Conclusion
To minimize making mistakes with the IRS, double-check your work. If you are unsure whether you’re getting it right, send your work to a tax professional. They will check everything over, and may come up with some tax reduction techniques along the way.
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