Tags: WalletHub | taxes | scams | audit

WalletHub: Don't Try to Hide From Taxes, Watch Out for Scams

By    |   Friday, 03 April 2015 09:00 AM

It's less than two weeks until the tax deadline, and personal finance website WalletHub has compiled a list of last minute tips from 19 tax experts to make the process a bit less painful.
  • "Don't try to hide" if you don't have the money to pay your tax obligation, the WalletHub summary says. "You're not going to slip through the cracks, and the IRS has proven far more willing to work with people when they're straightforward about their ability, or lack thereof, to meet tax obligations."
  • "Watch out for scams" — everything from tax refund theft to phishing and illegitimate tax servicing companies.
  • "Make an IRA Contribution." You can allocate up to $5,500 for most people and $6,500 if you're 50 or older. "Just make sure to send the contribution by April 15 and notify the deposit institution that you want it counted for 2014 tax purposes," WalletHub notes.
  • "Reevaluate withholdings." If you're receiving a refund every year, that's not a good thing. It means you're giving the government an interest-free loan every year.
The Wall Street Journal's Laura Saunders also offers several tips to maximize savings and avoid pitfalls.
  • "Understand the new healthcare provisions," she writes. "Under the Affordable Care Act, filers this year must check a box on Line 61 on the 1040 form if they had approved healthcare coverage for all of 2014, or possibly pay a penalty if they didn't."
  • Make sure all the data you enter for your wages and investment income are correct. "The only category in which the number of audits increased last year was in so-called correspondence exams of taxpayers earning more than $200,000," Saunders explains. A correspondence might stem from the IRS discovering a discrepancy between your return and data filed by your employer or investment brokerage.
When it comes to audits, Jeff Reeves, editor of InvestorPlace.com, cites several issues that could arouse suspicion of your return by the IRS.
  • "Typos and bad math," he writes in USA Today. "If the form you get from your employer says one number, and you input a different figure into TurboTax, you could open the door for an IRS audit."
  • Too many deductions. "If a taxpayer has an unusually high amount of itemized deductions given their income levels, an audit is potentially more likely," Paul Dunham, tax managing director at business services firm CBIZ, tells Reeves. Make sure you have documentation to back up your deductions.

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It's less than two weeks until the tax deadline, and personal finance website WalletHub has compiled a list of last minute tips from 19 tax experts to make the process a bit less painful.
WalletHub, taxes, scams, audit
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2015-00-03
Friday, 03 April 2015 09:00 AM
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