Last-Minute Filing Errors May Instigate Probe By Irs Auditors
Oh, no. April already? What happened to that promise to do your taxes early this year?
Well, no sense weeping about it now. The most important thing for a last-minute-filer is to avoid mistakes that can come with a rush job. You can easily cheat yourself out of a well-deserved refund, trigger an audit or even draw a penalty.
Some filers get audited no matter what, since the IRS does random audits. But certain returns pique the auditor’s interest. The Pennsylvania Institute of Certified Public Accountants says the odds of an audit are about 1 in 100 for people reporting less than $100,000 in income, and 4 in 100 for those who report more. Also:
People who are self-employed are audited more often than employees on salaries, since the IRS thinks the self-employed are more likely to under-report income or claim too many deductions. This is especially so if you claim a home office. Chances of an audit also are greater for restaurant servers, cab drivers and others paid in cash.
The IRS now gives special scrutiny to alimony, which should be reported as income. It compares the returns of the alimony payer with that of the recipient to make sure the deduction on one return matches the income on the other.
A couple of more last-minute tax suggestions:
Some tax preparers offer an instant refund, advancing you the money you’re due from the IRS. Generally, these aren’t a very good idea - the money is lent at interest rates as high as 50 percent when figured on an annual basis. You’re better off waiting for the money from the IRS.
But you can speed your refund by having it deposited directly into your bank account. Use Form 8888 to order direct deposit.
Need a tax form? If you can’t find it at your local IRS or post office, try the IRS hotline: 800-TAX-FORM (829-3676). But be prepared for a lot of busy signals.
You can also download any of 600 tax forms carried on the IRS World Wide Web site. The IRS home page is at: http://www.irs.ustreas.gov.
Also, many of the most commonly used forms are provided in the tax guides that show up in bookstores this time of year.