Posts tagged "taxes"

Why Did My Taxes Get Audited?

If you have recently been notified by the IRS that you are being audited, then you may find yourself feeling stressed out and wondering why this is happening to you. After all, the odds of having your tax return chosen for audit by the federal government are extremely low. However, there are some red flags that the government looks for as they are reviewing tax returns that can dramatically increase the taxpayer’s chances of being chosen for an audit. Some of the most common red flags and reasons for auditing are described in detail in this article. Becoming aware of these reasons can help you to avoid making the same mistake in the future or, if you are reading this out of curiosity, can even help you to avoid being audited in the future.

Being Self-Employed

If you do not have a W2 job that requires you to have your taxes deducted from each paycheck, then there is a larger chance that you will be audited. This is because self-employed individuals do not have taxes deducted from their pay and thus must file to pay quarterly estimated tax payments. Since self-employed workers often work as contractors for various companies and individuals, there may not be an official record of their earnings. As a result, it is easier for self-employed workers to falsely report their income in an effort to pay less in taxes. As a result, the federal government tends to scrutinize these returns quite heavily.

Itemizing and Taking Many Deductions

Aside from being self-employed, itemizing and attempting to take a lot of tax deductions can be a red flag for the government and may lead to an audit. All taxpaying citizens are entitled to some basic deductions, but there are others that are meant for people in very specific situations. For example, college students may be eligible for a number of deductions that can greatly reduce their tax liability and even entitle them to a refund. Attempting to falsely claim these or heavily itemizing may be suspicious to the federal government and could lead to audit.

Being in a Higher Tax Bracket

In general, the government is less likely to audit somebody in one of the lower tax brackets than those in higher ones. This is because the amount of money one could be cheating the government out of is often much, much higher in the higher brackets. However, this does not mean that lying or cheating on a tax return will not lead to an audit for those in lower brackets.

This article was provided by Todd S. Unger, Esq., a tax attorney based in New Jersey that can help individuals and small businesses with all federal tax controversey issues including IRS tax audits.


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Posted by Taxmaster - April 24, 2013 at 4:55 am

Categories: Federal Tax, Income Tax, Tax Law   Tags: , ,

Organizing Your Taxes For 2012

We all love the chance to start a new year with new aspirations going forward. Something about bringing in a New Year when really nothing has changed but the calendar dates. Some things are finalized or closed out and others are opened, as a company who completes the annual business year on the calendar date of 12-31-12. The entire year is reported for income, expenses and items that are amortized, purchased, employee expenditures the whole ball of wax is on the line when the tax year closes. Depending on the scale of your income and expenses you will likely be looking for help to do this. Sometimes you want to make a change of who you lean on to aid you with this important and complex process.

The cataclysmic end of the world did not come as expected by some when the Mayan clock, calendar completed the cycle in December. Some where all prepared they thought to face the three day black-out or whatever other imaginary event they presumed was forthcoming. It all seemed like a bunch of bunk to many, really the Mayan calendar was the visionary group of folks who failed to plan the growth of their society had a handle on the long-term demise of the world as we know it.

Some folks will tell you that the year 2012 was a turning point if not of the obvious Fourth of July type of stature with the big bang and the explosions, fires, hurricanes and other signs of nature. The people some corners believe the turning point was more subtle.  That the turn from the Internet era to the era of coming wisdom. Those people that can jump on this wisdom will separate themselves just as those did that adapted to the Information Age.

Navigate the Necessary Details Plan for Success

The best team in the business is easy to pick out if you look at the track records. The importance of getting the right team together when you have a big job to accomplish is very important. The business of getting your taxes organized for your business or personal is big time stuff. You cannot just gloss over the details and turn your forms in in the same careless manner you turned in your homework in high school. The stakes are so much higher; it involves money and also the penalties associated making errors are ominous.

Many people noticed the discrepancies tagged to the Enron team in the early 2000 time line. The Ken Lay and Jeff Stilling leadership team had some very creative approaches to making the company look good. The way in which they played the wall street brokers like a fiddle was clearly noted. It turned into a huge mess and we can touch on some of the gory details a bit later in this piece; the point is in integrity and philosophy.

Tax attorneys run a tightrope mentality for the clients they present to the Internal Revenue Service. No stone is left unturned and the details are closely calculated. Obviously, the Information Age is part of the puzzle for handling your filings with expediency and accuracy. This will keep your group out of hot water and if entitled you will receive your tax refund earlier than you had expected. Consistent performance over the years has builds up a very prominent client base for many tax attorneys.  When searching for a tax attorney you should do it mostly by referral as they probably have do a very good job and have a broad client base if you are hearing about them.

Goofy Mistakes Costly With IRS

It is true, just because you made some goofy or silly mistake more like an oversight, it will create a Red Flag with an agent. Some of the bigger mistakes may not be malicious but they will be flagged by the agent no doubt. Make a choice that has some legs; when it comes to a business process like filing your corporate or business taxes; use a team that can go to the hole and close the deal for you. It is clearly time to make the right move.

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By Rodney Hall

Rodney enjoys building content for Mommy Content and working with clients like Michelle Turpin PC Tax Attorneys.


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Posted by Taxmaster - March 9, 2013 at 12:39 am

Categories: Federal Tax, Income Tax, State Tax   Tags: , , , ,

Tax Season Tips: The Dos And Don’ts When You’re Filing


Welcome to Tax Season 2013. New rules, regulations and stipulations have added a steeper learning curve this year for filers. Don’t worry, we’re here to help. With internet services leading more and more people to file for themselves, some less obvious rules and warnings have been overlooked. Here are a few things you might want to ask your accountant.

Affordable Care Act

In order to fund the new Affordable Care Act, individuals with an income of more than $200,000 or married couples filing jointly with over $250,000 will be responsible for a 3.8% surcharge. Sure, this is aimed at higher-income families but the relatively low threshold will certainly affect married couples or middle class income filing jointly.

Social Security Wage Ceiling

One of the most talked about changes of this year’s tax law is the raising of the taxable wage ceiling to $113,00

0 to fund Social Security. There is no limit to the taxable wages for Medicare; however, an additional .9% will be assessed for individuals making more than $200,000.

Relief for Low-Income Workers

As part of the new 2013 tax laws, eligible low-income workers and families will reap the benefits of a relief in place to help ease their financial woes. The earned income tax credit is a refundable credit that reduces or eliminates tax paid. In other words, double check to see if you qualify and you might not have to pay a dime in income tax this year.

Higher Rates for Higher Incomes

For one thing, high-income filers will see an increase in their obligation – raising the rate from 35% to 39.5% for single citizens earning $400,000 or more and married couples earning over $450,000. Also, our 2% Social Security reduction has expired, meaning we now pay 6.2% of our income as opposed to the 4.2% from the past two years.


of your financial situation, these new tax laws will certainly alter your filing – either for better or for worse. Low income families might be able to take advantage of the earned income tax credit, while it seems high income individuals will be footing the bill to make up for it. Higher tax rates for Social Security, payroll and the Affordable Care Act will be hurting in the wallets of many Americans, and are reason to watch your return carefully. So if you are filing online, be smart. If you hire a personal accountant, ask the right questions. And most importantly, be sure to safeguard yourself against identity theft while you are sharing your vital personal information.

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Jason Sherman is a former accountant and enjoys writing about financial news and offers money advice to his readers.


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Posted by Taxmaster - March 7, 2013 at 6:52 pm

Categories: Federal Tax, Income Tax, State Tax   Tags: , , , ,

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