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

Best foot forward: Ferndale company to make custom shoes easy

Long specializing in insoles, Superfeet is putting 3-D machines in stores to make customized shoes.

Alaska Airlines will fly from Everett to 8 West Coast cities

Two destinations that didn’t make the list were Spokane and Hawaii.

Port of Everett CEO Les Reardanz has been called up and will be spending much of the year away from his office. He is going to Afghanistan. (Dan Bates / The Herald)
Port of Everett CEO reporting for duty — in Afghanistan

Les Reardanz has been called to active duty with the Navy for an eight-month deployment.

Early boarding pass: Everett’s rising passenger terminal

Here’s what to expect when two airlines begin passenger service at Paine Field later this year.

Trump’s company fights efforts to shed the president’s name

“Our homes are worth more without the Trump name.”

Western group asks Congress for pot biz protection

The group represents Washington, Oregon, Alaska, Hawaii, Montana and Arizona.

Airbus floats shutdown of A380 superjumbo

The aircraft is so big that some airports had to expand runways to accommodate the 550-seat plane.

Closing of 63 Sam’s Club stores impacts small business

The retailer has historically prided itself on the services it has provided small business members.

Ford goes ‘all in’ on electric cars with $11 billion investment

That’s up from the $4.5 billion that Ford said in late 2015 it would invest through the end of the decade.

Most Read