Be mindful now to avoid audits, penalties later

Here’s a group of 1 percenters no one wants to join: the group of U.S. taxpayers to be audited by the Internal Revenue Service next year. Be mindful now to avoid audits and penalties.

Certain types of writeoffs are going to raise red flags with the IRS, says this article at U.S. News &World Report. It suggests that you should expect the tax collector to verify such things as a claimed Earned Income Credit or an adoption credit. More important for many taxpayers is the need now to collect receipts for charitable gifts. If you file a return next year after simply guessing at the amount of your contributions to church or other charities, and you get audited, the IRS will disallow the deduction. bit.ly/z3s9gR

“Making too much money” is the enviable topper to a Kiplinger list of a dozen “audit red flags.” If an overly fat paycheck is not your problem, there are plenty of other issues that can trip you up, including off-the-wall deductions for money you spent on a hobby, or simply running a cash business. bit.ly/e2OMvi

The IRS hosts something called the Taxpayer Advocate Service, which might sound like a case of the fox watching the henhouse. Still, the service, which reports independently to Congress, was set up as a place to turn when individuals feel they’ve hit brick walls with the tax-collection agency. You can go to this site for links on how to ask for help or to report what you might think is a systemic problem at the IRS. www.irs.gov/advocate

Tax-law expert Dean Zerbe posted this Forbes item on avoiding audits. He cites a taxpayer advocate’s report to say good records are, bottom line, the best way to be sure you are paying what you owe and can defend your figures if it comes to that. “It is not a helpful story if the taxpayer points to an empty shoe box as holding the justification for the position taken on a return,” Zerbe notes. onforb.es/zHJ4k4

More in Herald Business Journal

Health-care consumers need to take the lead, so get smart

David Russian, CEO of Western Washington Medical Group, writes our third essay about fixing health care.

More business, more competition for Everett kidney dialysis center

Nonprofit Puget Sound Kidney Centers sees large for-profit competitors enter state market.

Molina Medical holds fall carnival for families in Everett

Molina Medical is hosting a free event for families in the Everett… Continue reading

Leadership Snohomish County celebrates 20 years of service

Leadership Snohomish County is celebrating its 20th anniversary. The organization was launched… Continue reading

Snohomish, Monroe manufacturers honored for innovation, excellence

Two Snohomish County companies have been honored with Manufacturing Excellence awards at… Continue reading

Remodeled home tours planned this weekend

This weekend, Edmonds-based Chermak Construction will participate in the 2017 Remodeled Homes… Continue reading

Barron Heating to celebrate anniversary at Marysville showroom

Barron Heating and Air Conditioning is celebrating its 45th anniversary from 10… Continue reading

Robots on Wall Street: Slow-footed regulators lose ground

Watchdogs have to figure out how to check computers running lightening-fast algorithms.

US budget deficit hits $666B, an $80B spike for the year

The deficit issue has largely fallen in prominence in Washington in recent years.

Most Read