E63 7 Tax Tips To Avoid Trouble With The IRS (Podcast)

E63 7 Tax Tips To Avoid Trouble With The IRS 956x538 blog

Summary

  1. Assume it’s income
    1. If any doubt, assume it’s income
    2. Examples: Lottery, gambling, contest prizes
  2. Don’t miss any 1099s
    1. IRS tracks these automatically
    2. Follow up to get them all
  3. Don’t ignore the IRS
    1. Reply to every letter in writing
    2. Don’t fight small bills, just pay them
  4. Keep your records
    1. Keep copies of your returns forever
    2. Ok to discard supporting records after 7 years
  5. Amend with caution
    1. Amended returns have a much higher audit rate
    2. Sometimes may be worth just leaving alone
  6. File on time (even if you can’t pay)
    1. It’ll save you penalties
    2. Then get on a payment plan
  7. They don’t like big refunds
    1. It’s a red flag for the IRS
    2. Maybe apply your refund to next year’s taxes

Relevant links: https://www.forbes.com/sites/robertwood/2019/01/30/10-tax-commandments-to-avoid-trouble-with-irs

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