Nobody wants to be in hot water with the IRS, right? Well, here’s a couple of things to keep in mind to steer clear of trouble and make sure you’re not being, well, a dumb ass when it comes to your taxes.
- Submit Smart Returns: Let’s start with this gem—don’t submit a messed-up tax return. Imagine this: a client of mine had mixed up their 1099-NEC trucking income with 1099-Misc Royalty. Result? Instant bear-poking and a date with an audit. The IRS had no choice but to ask, “Who did this, and why?” A major dumb move.
- Report All 1099 Income: If you’re getting 1099s, report ’em all. Missing one is like waving a flag that says “Audit Me!” It’s a one-way ticket to at least a mail audit.
- Sense-Check Your Expenses: Here’s another head-smacker—showing huge expenses without a matching story. A $50,000 loss on your Schedule C without a good explanation? That’s fishy. Unless you’re the next Amazon, it won’t fly.
- Accuracy Beats Suspicion: If your return smells fishier than a seafood market, make sure it’s accurate. The more it raises eyebrows, the more it should pass the accuracy test.
Remember, don’t mess with the bear, and don’t be a hog. Hogs get slaughtered, and nobody wants that. So, be smart, and accurate, and steer clear of dumb moves. Your sanity—and your wallet—will thank you.
Kelly Coughlin, CPA
CEO, EveryDayCPA.com
Founder,TaxRxCenter.org