Taxes

Are you new to taxes? Need some help with getting started. Many high school graduates find themselves with first jobs, college, striking out on their own. GrownUpGeek.com has some useful information in one of their forums for helping beginners with taxes. Truly, one of my favorite places to visit.


This year, I received a notice from the IRS. And you can bet my heart started beating really, really fast. And guess what, I did not open that envelope for two days! I couldn't, every time I started to open it, my heart would start beating faster and faster and I would have to put it down. Then I could settle down. On the third day, I finally decided, hey, I haven't done anything wrong, so open the stupid letter I told myself.

Well, I did. The IRS said that I failed to report income for a previous tax year 2004 and 2005. Since I hold a part time job and have my own business, I had to read on through to decipher what income it was they said I had under reported. Well, I knew it wasn't my business, if anything was under reported in my business it was my actual expenses. So, it had to be my part time job. Further reading and there it was, it was the part time job.

I looked over the rest of the paperwork and noticed that the 2005 tax year W-2 had been typed up on a 2004 tax year W-2 form. Nice work part time job! So, I took my paperwork in and found out that everyone had received the same notice. The mistake was not ours, it was the full charge bookkeepers mistake. We all handed her our paperwork, she realized her mistake and promptly took care of it. Several months later I received another notice from the IRS stating that the matter had been resolved.

Below are some high audit potential flags that might trigger an IRS audit:

* High Wages
* Large Amounts of Itemized Tax Deductions
* Unreported Taxable Income
* Self-Employment
* Home Office Tax Deductions
* Unreported alimony
* Automobile Logs for people who use their car in business

Want to avoid a tax audit? Then be sure to use the correct forms, double check your math, report everything accurately and most important, be sure you can back it up.