Gambling With The IRS
It’s tax season again! But you have less than a 1% chance of being audited. And unless you enjoy hearing from the IRS there are things you can do to improve those odds. How you fill out your return could make the IRS sit up and take notice. Today, Kingdom Advisors President Rob West has six ways to increase your chances of being audited.
Obviously we’re taking a tongue-in-cheek approach to this topic as no one wants to improve their odds for getting audited! But if you take too many liberties with your return, it is a bit like gambling.
• The Bible tells us that we are to always practice integrity and to pay our taxes.
• If you’re “math challenged,” it’s especially important to double and triple check the amounts you enter. This is where using tax software can be very helpful. The IRS may not throw you in jail for making a math error, but if you have several on a return it very well could trigger an audit.
• Failing to report on-the-side income can get you into trouble.
• Don’t claim too many charitable donations. You might be tempted to do that as a way to get above the threshold of the standard deduction, but don’t try to deduct anything you’re not entitled to. Always make sure to keep the proper paperwork to document your donations.
• If you’re self-employed, don’t report excessive losses on your Schedule C.
• Don’t claim a home office deduction when you shouldn’t.
• It’s acceptable to round off to the nearest dollar. But if you’re always rounding off to the nearest 10 or 100, the IRS computer will spit that out every time.
In today’s show we also answer your questions:
• I have a SEP account and have questions about getting this money out.
• I’m a full-time minister and receive about $12,000 in housing allowance. I owe $175,000 on my home. Is it better for me to pay the $12,000 at the beginning of the year when I get it or should I just pay some extra per month? Which would help this mortgage to go away more quickly? And should I refinance?
• I have a 401(k) from a former employer. Should I roll over this old one into the new one that I have with my new employer?
• What is a family foundation and what can you tell me about it? Is there something better? The National Giving Foundation website, ncfgiving.com, provides more information on this topic.
Ask your questions at (800) 525-7000 or email them at questions@moneywise.org. Visit our website at moneywise.org where you can connect with a MoneyWise Coach, purchase books, and even download free, helpful resources.
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