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How to Prepare for a Tax Audit

How to Prepare for a Tax Audit

Fear or panic might be your first response when you receive correspondence from the IRS. I know that’s how I’d react! But don’t let this initial panic and fear cause you to make mistakes. Take a deep breath and calm your racing heart. There are steps you can take to help you prepare for a tax audit. Request More Time You’ll need time to gather documents at the very least, so requesting additional time is not unreasonable. In addition, it can give you the time you need to consult with your tax preparer and a tax lawyer if you need one. Hire a Professional If you hired a tax preparer to complete the documents in question, have them consult with the IRS about the audit. If possible, have them meet with the IRS and deal with the audit on your behalf. Meeting with the IRS on your own is not necessarily a good idea. You could innocently reveal information the IRS representative didn’t ask for. This could cause additional problems for yourself that may not have even existed when the auditor arrived. Gather Records First, it’s important keep your records up to date at all times. If you are ever ...

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11 Tax Deductions You Might Be Overlooking

11 Tax Deductions You Might Be Overlooking

Tax time is right around the corner whether or not you are prepared for it. We all know a few people who are never prepared for tax time. But even if you feel like you have prepared for tax season, you might not be as ready as you think. The truth is that there are tons of tax deductions you might qualify for. With so many, it can be hard to keep track of all of them. To help you out and make sure you save as much money as possible, here are at 11 tax deductions you might be overlooking. 1. Moving Expenses When you relocate because of your job, you might be able to claim those costs as a deduction when you file your taxes. Of course, you must meet certain qualifications. 2. Student Loan Interest You can deduct the interest you paid for your student loans, or the interest student loans of any dependents. There is a cap of $2,500 and you have to have an adjusted gross income of $80,000 or less to qualify for some of this tax deduction. 3. Membership Dues If you pay membership dues that help you conduct your business, you might be ...

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How to Wrap up Your Tax Season

This post was sponsored by #BlockAdvisors. All opinions are our own. As the close of the 2015 tax season rapidly approaches, it is not the time to sit back and do nothing until next year. There are plenty of tasks you can start on to make next year’s tax season flow even smoother. Here are some ideas of how to wrap up your tax season and get a jump on next year. 1 Work with Your Tax Preparer Maintain a good relationship all year long with the person who prepares your taxes, like the tax professionals at BlockAdvisors. Your tax preparer should know your history well enough to contact you early in the year if there are going to be changes that could affect how you conduct your business the rest of the year, or after completing your tax return from the prior year. Don’t wait until next year to find out new tax laws mean you will owe money to the IRS when you counted on a refund, for example. By knowing in advance, you could set aside money in preparation to pay in. If your accountant or tax professional hasn’t let you know of the current changes, be ...

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5 Tips to Prevent Tax Identity Theft

It’s March, the days are flying by, and already we are over one sixth of the way through the year. For those who don’t already know, the income tax return deadline for this year is the eighteenth of April, and estimates show it is expected that over 240 million tax returns will be filed. Of those, approximately 20% could be fraudulently filed using someone else’s information. Sound a little scary? It should. But there are ways to prevent you from becoming one of the victims. Here are five tips to help you prevent tax identity theft from happening to you. 1 Shred Your documents Before you throw away any personal or household documents, including invoices and tax returns, stop. Instead of trashing it, shred it. If you don’t own a shredder, you can invest in one for a reasonable price, usually around $35.00, at any discount store. It’s worth the investment and a small price to pay compared to the high cost of cleaning up your credit after you’ve been targeted by a thief. However, if you can’t afford to buy a shredder, maybe you could simply use scissors to cut up those identifying documents, if you don’t have too ...

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Tips For Calling The IRS

calling about tax fines and penalties

One of the fun things about being self employed is the taxes. I say that in the most sarcastic way because anyone who has ever had the opportunity to be their own boss understands how confusing and difficult IRS rules truly are. When you add multiple streams of income or money from things like rental property or dividends, it gets even more exciting. I wasn’t really surprised when we got several notices after filing our taxes. It seems no matter how careful we are with keeping track of our business income and expenses, and even with hiring a CPA, the IRS always finds something wrong with our tax return. This year, one of our three notices was for a late corporate filing with a fine of $195! I knew I had the proper documentation to prove otherwise, so it was time to make the call. Speaking to the federal government is not for the faint of heart, so here are my tips for calling the IRS. Have All The Proper Documentation The reason I was so confident about calling the IRS was because I had a copy of the from we sent in to request an extension to file our ...

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