Tags: Grant | tax | break | error

CNBC's Grant: Take Your Tax Breaks, Don't Make Tax Mistakes

By    |   Thursday, 26 March 2015 08:00 AM

With April 15 fast approaching, it's time to start focusing on your taxes if you haven't done so already.

It goes without saying that you want to maximize your tax breaks to avoid giving any more money to Uncle Sam than you have to. And, of course, you also want to avoid making any mistakes on your return that might trigger an audit from the IRS.

CNBC's Kelli Grant provides several examples of how to keep more of your money.
  • There is plenty of room for errors on your tax form. Some of them are quite simple. "Believe it or not, one of the most common errors is not putting in the right Social Security numbers for yourself, your spouse and your dependents," tax attorney Barbara Weltman tells Grant.
  • Double-check all the information you place on your tax form. The cost basis for your investments is a particularly important issue. "If you type in the wrong basis amount, you could be under-reporting or over-reporting your capital gains," Melissa Labant, director of tax advocacy for the American Institute of Certified Public Accountants, tells Grant. Transposing numbers is a common mistake also. "If you're claiming a credit for tuition and you paid $3,100 but put in $1,300 instead, you've cost yourself big-time there," Weltman notes.
"Common errors and overlooked deductions can add up quickly when filing your tax returns," Grant writes.

If worse comes to worst and you get audited, Jason Notte of Main Street offers several tips to emerge from the ordeal unscathed.
  • "Make sure it's legit," he writes. More scam artists than ever are prowling after your personal data. Pretending that they are IRS auditors is one way they try to steal from you. Don't give out any important information to anyone you aren't sure is a legitimate IRS representative, especially if you are contacted by phone or email. An IRS audit almost always starts with a written letter.
  • If it is a legitimate audit, "don't go in alone," Notte advises. "Unless you're especially deft at preparing your taxes and dealing with IRS or state auditors, you're likely going to want someone to either coach you or — in the case of an in-person audit — be in the room to help out."
  • "Get organized." Make sure you have proof of your income and deductions."

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With April 15 fast approaching, it's time to start focusing on your taxes if you haven't done so already.
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Thursday, 26 March 2015 08:00 AM
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