Well… the headline of the story was more grabbing than the actual content….but heck it worked on us, and grabbed our attention….
Here are the key points from the IRS article:
1. Gather tax paperwork and records for accuracy to avoid missing a deduction or credit.
Some information taxpayers need before they begin includes:
- Social Security numbers for everyone listed on the tax return,
- Bank account and routing numbers,
- Various tax forms such as W-2s, 1099s, 1098s and other income documents or records of digital asset transactions,
- Form 1095-A, Health Insurance Marketplace statement,
- Any IRS letters citing an amount received for a certain tax deduction or credit.
We are good with this… a little obvious, but ok… Measure twice cut once and be safe! Onward ….
2. Remember to report all types of income on the tax return. (We would add, reported or not!)
This is important to avoid receiving a notice or a bill from the IRS. Don’t forget to include income from:
- Goods created and sold on online platforms,
- Investment income,
- Part-time or seasonal work,
- Self-employment or other business activities,
- Services provided through mobile apps.
We would add, just because you did not receive a tax notice, DOES NOT mean the IRS did not and is looking for the appropriate notation on your tax return (Huge amount of time this occurs with cashing Series EE bonds) … a missing item is an easy automated paper letter audit….and as mentioned here absolutely requires a response
From the afore mentioned post :
Amazingly nearly 2/3 of audits, which are almost all done by paper due to the cost of a field audit are not answered, resulting in a claim on the taxpayer. Bottom line, make sure you show the IRS that you’re answering their questions in a timely fashion and expect a paper computer driven notice.
3. File electronically with direct deposit to avoid delays in receiving a refund.
We are really good with this one, and have been encouraging ES payments electronically for some time now.
Ok… that is about the end of what we like in the article and what applies to everyone that is reading this post….
We find the IRS reasonably fair… sometimes they lead with you are the bad guy trying to cheat…but this is usually diffused with a nice appropriate timely answer….
Have a Great “Basic IRS Tips Review” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth