So it’s tax season, and I’m eyeing several possible but iffy deductions that I could report, just a few hundred dollars here and there. I was wondering, how seriously do people in this group take their taxes? I’ve never met anyone who’s been audited, and it’s said that Uncle Sam only messes with big fish who’ll bring in enough back taxes to justify the expense of prosecution if caught. I’m small fry. Still, I worry. I’ll probably take the high road again this year just to save myself the stress. Besides, I file online, and I don’t think a tax website’s going to back me up in court.
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Goody two-shoes
- Thread starter symbios
- Start date
With more and more people E-Filing the IRS can now use computers to spot check returns. This year they are looking to audit 3 million people. Before when you had paper returns employees had to review. Now with computers it is as simple as setting up a small algorithm to flag certain items.symbios said:
Just my $.02
symbios said:
What's "iffy" mean? If you're cheating on your taxes, then be prepared for possibly having to deal with an audit. Hell, even if you are following the letter of the law exactly, make sure you keep those records well - as people who don't stretch get audited too.
Whoever told you that audits only happen to those where the expense is justified was wrong. The IRS audits tons of individual taxpayers. Yes - they do focus on the blatant offenders more and put more man-power into big cases, but they always do a significant number of small-fry individuals as well as some random folks thrown in for fun (yes - that's right - it is possible, though unlikely, to be audited for very little reason at all).
That being said: I say you take everything "iffy" you can - but be prepared to explain it to someone in a suit someday...
Cheers,
- Oak
I'm a small-fry.
They audited my return some years ago, maybe 10 or more. They found a honest math error on my part worth around $35. Cause it was some time later I had to pay a penalty and interest. Seems to me that $35 mistake cost me around $90.
No big deal but it sure surprised me they even looked and I was surprised what it cost in interest and penalty. It was a little unnerving to get a letter from the IRS in the mail.
Keep good records, nothing wrong with tax avoidance, tax evasion that's another issue.
They audited my return some years ago, maybe 10 or more. They found a honest math error on my part worth around $35. Cause it was some time later I had to pay a penalty and interest. Seems to me that $35 mistake cost me around $90.
No big deal but it sure surprised me they even looked and I was surprised what it cost in interest and penalty. It was a little unnerving to get a letter from the IRS in the mail.
Keep good records, nothing wrong with tax avoidance, tax evasion that's another issue.
stogieman
" Herf King "
- Joined
- Oct 30, 2002
- Messages
- 18,309
My ex-wife and myself got audited in 2003 for our 2001 tax return. They found a major error and we owe the IRS around $2300. In Delaware, you get your divorce right away but your property settlemnt could last for years. We have our final settlement scheduled for March 31st and part of it is to split the $2300. All I have to say to you Symbios, if you want to Play, be ready to Pay..... :0
Allofus123
Here ducky, ducky, ducky!
- Joined
- Aug 25, 2001
- Messages
- 3,867
They're CPA's for a reason.
I'd venture to say that if you're trying to take a deduction by saying its "iffy" its not deductable. Don't let the greed of a few dollars knock you off the high road. :thumbs:
I'd venture to say that if you're trying to take a deduction by saying its "iffy" its not deductable. Don't let the greed of a few dollars knock you off the high road. :thumbs:
Some tax websites will offer support in an audit situation. I’ve used taxbrain.com the past three years and they have an audit defense service for a nominal fee. But thankfully I’ve never had to avail myself of it. So whoever you’re using make sure they offer something similar. But, don’t bank even on that to save your bacon if you’ve tried to pull a fast one. It just ain’t worth it. Stick to the high road, stress kills
boxman
boxman
gamelover2004
New Member
- Joined
- Jan 22, 2004
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- 150
I'm not a CPA but a close family member is and I found I get the same return when I use TurboTax Deluxe ($39.95 @ walmart) and it also does our state return. :thumbs: It even got us money back on our state this year! It's worth the money and your first efile is free.
Good Luck,
gamelover2004 :thumbs:
Good Luck,
gamelover2004 :thumbs:
sir-smokes-a-lot
A Freudian Slip in progress
- Joined
- May 1, 2003
- Messages
- 2,025
well, as long as you follow the GAAS, you will be good to go
(generally accepted auditing standards)
just tell them that, according to fact that both US and UK accounting pricipals are based off of/developed in the private sector, you thought cutting a corner or two was still following procedure.
would still recc. agaist too many "bonuses" though.
though, realistically, and to quote my financial accounting book
"An audit does not attest to the absolute accuracy of financial statements"
:thumbs:
(generally accepted auditing standards)
just tell them that, according to fact that both US and UK accounting pricipals are based off of/developed in the private sector, you thought cutting a corner or two was still following procedure.
would still recc. agaist too many "bonuses" though.
though, realistically, and to quote my financial accounting book
"An audit does not attest to the absolute accuracy of financial statements"
:thumbs: