If you’re facing IRS problems or have just resolved them then the you want to make sure that, as you move forward with your life, you avoid these problems in the future. For that reason we want to provide you with some key tips that can help you avoid IRS issues.
First – File on time.
- This is the most effective and simple advice we can give you. However, it is also one of the most common reasons that taxpayers get themselves in trouble. Remember, even if you can not afford to pay your taxes you should still file on time. If you don’t then you face significant penalties and further complications. Not filing can be considered a felony and has harsh consequences. So, do yourself a favor, file your taxes on time then see what you can do to take the steps to pay them.
Second- Keep Good Records
- You must keep records of your income, expenses and other circumstances that might affect your taxes. Keep these records for several years after you file your return. IRS audits can happen three or maybe more years after you file. If you have clear and accurate records then facing an audit will go much smoother for you.
Third – Don’t Try To Trick Anyone
- We know, taxes are not fun, no one likes paying them. However, it is the law to pay your taxes. Yes, there are a lot of ways that you might be able to reduce your taxes using deductions and other legal methods. No matter what, we encourage you to file your taxes accurately and legally. Don’t try to outright cheat the IRS. The problems cheating will cost you are not worth it. Make sure you work with a qualified professional and make sure that any strategies that you use to lower your tax bill are legal.
Fourth – Document All Deductions.
- If you claim any deduction other than the standard deduction then you must document all of them. A high level of deductions can raise red flags at the agency. You should not be scared to take legitimate deductions but just make sure that they are legal and that you have documentation to prove them. That way, if the IRS ever comes knocking, you will be able to prove the legitimacy of each deduction.
Fifth – If You Are Self Employed Withhold Income From Each Check.
- Being self employed has it’s benefits but you can’t depend on your employer to withhold taxes from your paychecks to make sure that you are able to pay your tax bill. This task is left up to you. So plan ahead and withhold a portion of your income. If you don’t then you often will end up with a tax bill that you will not be able to pay come tax time. The amount you withhold will vary depending on your specific situation. In general it usually is good practice to save at least 20% of your income. Talk with a qualified professional if you need help figuring out how much you should put aside.
Finally – If You Are a Business Owner Pay Your Payroll Taxes.
- The IRS takes paying all taxes seriously but they are very aggressive when it comes to paying payroll taxes. Don’t even try to avoid paying your company’s payroll taxes. If you are confused about how to pay them then get qualified professional help immediately.
Hopefully these suggestions will help you avoid problems with the IRS. If you live in the Northern Illinois area and already are dealing with an IRS problem then remember, we can help. Talk with us today and lets see what we can do to to help you face your tax issues and move forward into a better life. https://chicagotaxteam.com/about-us/