Accidental Tax Fraud
Taxes can be tough and occasionally we are all tempted to fabricate numbers to our advantage. Most of us have made mistakes in calculations, which is not ideal but forgivable. The IRS does raise suspicions, but errors come by often and the situation is resolved by making corrections. More than 15% of taxpayers fail to abide by the tax code, but merely 1% are actually convicted for committing tax fraud. We all want to keep our hard-earned money for ourselves and owe nothing to the government, but the law is non-negotiable. Some of us accidentally pay more than we owe, which is okay because we are compensated via tax refunds. On the other hand, underpaying can impose fines or penalties even when it’s an honest mistake.
If your taxes have you confused, it is best to seek professional help. Individuals owning multiple high value/taxable assets are more likely to face difficulties in determining payables and deductibles. A real estate lawyer can help with sorting out the complications and maximize profits.
Avoid these common mistakes while managing taxes, so you don’t end up committing tax fraud:
Not disclosing your Total Income
It’s the little white lies that come back to haunt us every time. There is no point in hiding the wages you earn from your regular 9 to 5, as the IRS receives a copy. However, the additional bucks you made through freelancing or returns on an investment are something you would like to keep to yourself. The money you won in a lottery or the pension of a relative is also included in your income. According to Bail Bond Company in Seattle, WA, it is commonplace of people to camouflage secondary sources of income; nonetheless, if the IRS gets a whiff of the unreported cash, consider yourself in deep trouble.
Exploitation of Deductions
Several taxpayers are eligible for more than the standard deductions. Many of them use this loophole to their advantage. Exaggerating expenditures, in areas such as medical costs and business expenses grants them greater tax refunds. Do not sell your personal items under the list of merchandise exclusive to business purposes. You might be fooling the IRS for now, but a future investigation could cost you a lot more than you are snaffling.
Not Filing Returns
Being lazy is one thing, but simply ignoring your duty to file tax returns is a criminal offense. Work out all your tax details before the 15th of July and fulfill the obligation, or you will regret it in the near future. If it seems like too much work, simply ask someone capable to assist you with the task. Do not procrastinate and just get it done as soon as possible.
Contributing to charitable causes is among the most humane and compassionate things a person can do. Donating to charities is one way taxpayers can qualify for greater deductions. Sadly, many so-called ‘philanthropists’ exploit this incentive and ruin the true purpose of giving to the less fortunate. Overvaluing noncash donations seems to be the most convenient method to redirect money to oneself. People will giveaway old and worn out stuff, whilst claiming an amount that is three times the actual worth.