These Illegal Tax Moves Could Cost You Big
These Illegal Tax Moves Could Cost You Big
Everybody fibs on his or her taxes right? What’s a few dollars here and there? The IRS will never notice it. While it’ true that many taxpayers alter the real numbers on their tax returns and get away with it, honesty is always the best policy. Cutting a few dollars off your income, or claiming more credits than you deserve might not seem like a big deal, but if you get caught, the price could be stiff.
Honest Mistake or Willful Cheating?
There are two kinds of tax mistakes on a tax return: accidental and willful. If you make an honest mistake, then you typically won’t find yourself in any real big trouble. You do have to correct your mistake, and it could still cost you. Just because it was an honest mistake, that doesn’t mean the IRS will forgive you. If you owe more money than you paid, then you will need to pay that amount. Most likely, if you pay it off in a timely manner, then you won’t be faced with penalties and interest. However, that is not always the case.
If the IRS believes you willfully fudged on your tax return, then you will almost assuredly face penalties and interest. If your lies are really bad, then you could even face some jail time. So, if you want to avoid these kinds of penalties, then make sure you stick to the facts. Be completely honest on your tax return and you’ll never have to worry about being punished for the information on your return.
Avoid These Common Illegal Tax Moves
Here are some illegal tax moves that you should definitely avoid if you want to stay on the IRS’s good side:
Not reporting all your income – no matter the source, whether you’re employed, self-employed, or both, you need to report all types of income. That includes gambling earnings, capital gains, and much more. You should report ALL income you earned throughout the year. Failing to do this could land you in hot water with the IRS.
Ignoring current tax law – tax laws change every year. That’s especially true this year. Make sure you use the most current tax laws when filing. The IRS will have little or no sympathy if you make this mistake.
Claiming your pet as a dependent – people love their pets. Some animal owners treat their pets like they’re part of the family. But when it comes to taxes, you can’t count your pets as dependents. This is a rather easy one for the IRS to catch because your furry friends don’t have a valid Social Security number.
Deducting personal purchases as business expenses – many taxpayers use this trick when they file. It’s an easy way to write off personal items. However, if you can’t really prove that you have a business need for the item then the IRS will hold that against you. And you will pay the price.
Claiming tax credits for which you don’t qualify – we all like receiving tax credits. It’s free money from the government. However, if you don’t qualify for a certain credit, but you claim it anyways, the IRS will punish you if they catch it.
Remember, honesty is always the best policy. In order to avoid penalties and interest, as well as fines, or even jail time, just be completely honest when you file your tax return.
We hope you found this article about “These Illegal Tax Moves Could Cost You Big” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
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Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
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Introduction: In this interview, Alan Olsen, CPA and featured guest Micah Fink discuss how Horses and Heroes use horses to aid veteran care and much more. Transcript: Alan Olsen Welcome to American Dreams. My guest today is Micah Fink, CEO and founder of Heroes and Horses. Micah, welcome to today’s show. Micah Fink Alan, thank…
Introduction: Two dad’s discussing life balance in the hectic world of IPOs with featured guest, Travis Combs, Managing Director at the Effectus Group. In this interview, Alan Olsen, CPA, MBA and Travis address family, faith, career, client’s best interest, and trying to strike a balance. Transcript: Alan Olsen Welcome to American Dreams. My guest today is…
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Introduction (teaching business success at Barr Business School) In this interview, Alan Olsen, CPA, MBA discusses teaching business success with Dr. Frumi Rachel Barr. Dr. Frumi Rachel Barr is the Founder and Chief Mentor at the Barr Business School. Transcript: Alan Olsen Hi, this is Alan Olsen and welcome to American Dreams. My guest today is…