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

Peoples, HomeStreet banks bump lowest salaries after tax cut

The banks with Snohomish County branches will raise minimum salaries for employees to $15 an hour.

Electroimpact cuts Mukilteo staff by 9 percent

“What we’re missing now is a monster anchor project,” the company’s VP said.

Exotic animals find compassionate care in Bothell (video)

At the Center for Bird and Exotic Animal Medicine, vets treat snakes, hedgehogs and even kangaroos.

How can you tell if you are getting good financial advice?

Assume that it’s still the same buyer-beware market that has always existed.

Amanda Strong (left) tries on an Angel of the Winds Arena hat as she and Courtney Brown hand out gift bags after the renaming ceremony Dec. 13 in Everett. The new name replaces the Xfinity name. (Andy Bronson / Her file)
Angel of the Winds to break ground on $60M casino expansion

“We think we’re on the cusp of becoming a major resort.”

In this Dec. 20, 2017, photo, a clerk reaches to a shelf to pick an item for a customer order at the Amazon Prime warehouse, in New York. (AP Photo/Mark Lennihan, File)
Amazon’s potential HQ2 sites leaves many cities disappointed

And yet, some municipal leaders are looking at the bright side of being rejected.

How do you retrieve an errant Boeing 737 from a muddy slope?

Turkish authorities used cranes to lift a plane that skidded off a runway.

Don’t take economic forecasts to the bank — or the casino

Air travel delays could spur a rebirth of passenger rail service.

Emirates orders 20 more Airbus A380 jumbos, saving program

The Dubai carrier also has options to buy 16 more. The program seems safe until 2029.

Most Read