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Tax Deductions that Alert an Auditor

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Tax Deductions that Alert an
Tax Deductions that Alert an Auditor       Auditor
                    for taxpayers try to claim as many deductions       their annual
       It's natural for taxpayers to try to claim as many deductions on their annual tax returns. It's clear
that they         want the IRS any more than they actually have           and that they want to pay less
that they do not want the IRS any more than they actually have to, and that they want to pay less
whenever possible. However, a number of         deductions have been utilized so many
whenever possible. However, a number of tax deductions have been utilized so many times or claims
    deductions are almost unreasonable that when these are reflected in the tax return, the IRS will
for deductions are almost unreasonable that when these are reflected in the tax return, the IRS will
always notice. Sure there are always truthful and          reasons for             of the deductions,
always notice. Sure there are always truthful and valid reasons for using any of the deductions, but
depending on the amount of the attempted deduction, will be                  clear    any IRS agent that
dependingon the amount of the attempted deduction, it itwill be very clear to any IRS agent that
                     and audit will be               important to note                   will cause
something is wrong, and audit will be required. It's important to note that an IRS audit willcause you to
have  problems related to your taxes.
have problems related to your taxes.

                          misunderstood deductions is the home office. People think
        One of the most misunderstood deductions is the home office. People think that they can claim
a deduction equivalent to the entire value of the house if they make it an office. They don't realize that
  deduction equivalent to the entire value of the house if they make it an
                                     taxpayers                  their rights. Remember            auditors
certain rules are outlined to orient taxpayers of the extent of their rights. Remember that IRS auditors
               are outlined
have often seen many inconsistencies and errors on tax returns. In              they have computers that
have often seen many inconsistencies and errors on tax returns. In fact, they have computers that
calculate the correctness of tax returns and even the probability on certain criteria which will
calculate the correctness of tax returns and even the probability on certain criteria which will aid them
    the decision audit one        return over another. you have simply deducted           entire value
in the decision to audit one tax return over another. If you have simply deducted the entire value of
your house because you have a home office, then you are up for some IRS
your house because you have a home office, then you are up for some IRS trouble.

                                               can deduct the total amount their auto expenses from
        Business owners also believe that they can deduct the total amount of their auto expenses from
        Business owners also believe that
their taxes when they advertise their company's name on their cars. What they should know is that only
                      advertise their company's name on their cars. What they should know is that only
deductions equivalent to the cost paint and other advertising materials                claimed. Another
deductions equivalent to the cost of paint and other advertising materials can be claimed. Another
alternative is claiming for a deduction on certain percentage of their total auto expenses. This
alternative is claiming for a deduction on aacertain percentage of their total auto expenses. This
percentage is equal to the vehicle's mileage for business divided by its       mileage.      instance, if
percentageis equal to the vehicle's mileage for business divided by its total mileage. For instance, if
                                                                        business, then you can claim
you have a total annual mileage of 10,000 and 2,000 of this is used for business, then you can claim for
      of your total auto expenses as deduction. This scenario then magnifies the necessity
20% of your total auto expenses as deduction. This scenario then magnifies the necessity to keep   keep
accurate logs of      mileage so you will not have IRS problems when claiming deductions related
accurate logs of your mileage so you will not have IRS problems when claiming deductions related to
your auto expenses.
your auto expenses.

        Deductions regarding body parts and pets also commonly appear on people's tax returns.
        Deductions regarding body parts and pets               commonly appear on people's tax returns.
Surprisingly, people do attempt to claim for deductions of body parts donated to science.
Surprisingly, people do attempt to claim for deductions of body parts donated to science. Sadly, in most
cases, donations to non-profit organizations can't be deducted unless 100% of your ownership rights, or
cases,donations to non-profit organizations can't be deducted unless 100% of your ownership rights, or
interest, donated. The IRS does not consider donating a body part alone as giving up 100% of
interest, is donated. The IRS does not consider donating a body part alone as giving up 100% of your
                                                                            who tries to deduct
ownership rights or interest since it's just a 'part' of your body. Anyone who tries to deduct either body
                               since it's    a 'part' of
parts or their pets on their tax returns should also prepare to deal with some IRS problems.
parts or their pets on their tax returns should also prepare to deal with some IRS problems.

				
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