Juliette Fairley for MainStreet.com writes: When Kayleigh Terranova self-filed her tax return last year, the
26-year-old Buffalo resident found the process confusing and
time-consuming.
“I would second guess myself and wonder if I had done everything correctly,” she told MainStreet.
“I hated the stress of it all, but I also didn't want to have to pay
money to get my tax return filed.” Though her then-fiancĂ© is a CPA, his
new job during tax season and their wedding planning left him with
scarce free time to help.
Terranova is not alone in her
misery: some 47 million of the 145 million annual tax returns filed to
the IRS are self-prepared. But that self-reliance can spell trouble for
tax-filers.
To prevent the costly consequences of mistakes
wrought by independent and budget-minded filers, experts advise avoiding
certain pitfalls, because one misstep could cost hundreds of dollars in
potential return money or could lead to possible fines and jail time.
Too Virtuous?
Presenting yourself as overly altruistic can tip the IRS off to possible tax fraud.
The national average for charitable contributions is about 3% of
Annual Gross Income, according to the IRS, and tax payers who inflate
their charitable contributions beyond what could be expected in their income range could invite the scrutiny of an audit.
“If you gave 1% of your AGI to charity last year and now you are
reporting a 5%, it will create a red flag,” said John Gregory, tax
practitioner and founder of 1040Return.com. “When giving money to a
charitable organization, make sure you pay with a check and have a
receipt from the organization showing your generous gift.”
SNIP, the article continues @ MainStreet.com, click here to continue reading....
Wednesday, February 18, 2015
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