Beware Illegal Tax Moves
Every year when people file their taxes, some might be tempted to misappropriate some expenses here or there to change their tax brackets or deductions. Here is a warning, do not do that. Even filing your tax return incorrectly on accident can be hard to correct with the IRS, so purposefully changing items to make your refund higher is definitely not a good idea. Here are some ideas people think they might get away with and never do.
A common area that people on their tax refunds is deducting personal purchases as a business expense. For definition, an eligible business expense must be incurred in a current tax year, not reimbursed by an employer and be both ordinary and necessary. Filers may try to get tricky and have an expense appear like a qualified business expense, but pushing the law is not wise. If you have a question be sure to keep receipts and talk to a professional.
Another common area is not reporting all your income. The IRS can easily track where your spending is at thanks to the lower usage of cash now. With everything becoming digital, the IRS will be able to see what you’re taking in versus how much you claim. Be sure to detail all of your income when filing.
Taxes can be hard for some people, and some of these might be innocent mistakes. You don’t want to fall on the wrong side with IRS so if you have questions, contact our professionals at the Center for Financial, Legal & Tax, Inc.