2010 Federal Tax return – How to avoid an tax Audit in 2010 for your tax return
It could be challenging to find a soul on this nation who doesn’t dread the thought of an IRS tax audit. Then you will find those who have endured this trial and survived to narrate the tales of pure horror and torture, now although a few of these stroy have an element of truth to them others could be slightly exaggerated, however the fact remains where an IRS audit is definitely not a situation that you want to end up in. The IRS reserves the right to audit the earnings and expenses of people or businesses at any point. The only good news here is that the IRS can only grasp up sufficient time to review about 1.5% of all income tax returns in the country. However, it is best to take certain precautionary actions to avoid an IRS audit.
One of the most effective ways to hold the hassles of an IRS inspection at bay is to ensure that you report all your income no matter what its source. Even if you’re an employee, industry owner or an independent freelancer it is usually crucial for being meticulous when filing your income taxes. The IRS suggestions explicitly point out the kinds of income that need to be talked about. If you have any hesitation regarding your income, get in contact with a Dallas attorney and make sure that you be familiar with your income that need to be reported. You will not only have to declare your salary but also other types of earning including tips on your income tax returns.
Also, ensure that you have all of the pertinent documents with you in order to aid the facts presented on your income tax returns. If need be, you must be able to prove everything which has been listed. As an employee, you will have to rely on your employer to arrange the W-2 or the 1099 form; this may have information about your income that you earned in the earlier year while you were working for a particular corporation and other such pieces of information. While submitting your income taxes, make sure at the number in your W-2 are similar to the entries in your income tax returns.
Simple mathematical mistakes also have the possibility of ranking up several trouble, so this is imperative to ensure that your income taxes are calculated correctly. Since the IRS uses an automatic system, it takes them a couple of seconds to spot such errors and even though it might have been a real mistake, it will definitely put you in the IRS scanner that is what you do not want. Just remember to double check each entry on your income tax return papers. Occasionally mistakes occur since the erroneous entries have been entered at the wrong line, ensure that you check the entries and also the lines where they are on. If the mathematical computation of the income tax returns is sloppy, the IRS will be inclined to think that you simply have been equally careless to the other areas of the tax return which can often be ground enough for an IRS audit.
A blaring mistake which is usually committed by independent contractors and companies is declaring their house a home office. Based on taxation laws, for the house to eligible as a house office, an element of the property should be dedicated to the sole purpose of conducting business. In other words, you can’t treat your own dining room as your own office and wait for a tax deduction. If you are not careful and simply claim for home office deduction, you could invite the IRS’s attention. Also, you can’t declare more than 20% of your home as the home office. This means that any deductions of expenditures including rent, mortgage repayments, utility bills etc are going to be limited to 20% of the amount.
To know of best 2010 IRS tax deductions visit my website on IRS Tax deductions for 2010 Income
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