Nobody wants to get in trouble with the government, and this is especially true when it comes to the IRS. Because of that, all of us tend to pay a lot of attention to what we’re doing when we’re filing our taxes. While the majority of us have been able to do so without any major issues, there are a few different ways to get into trouble with the IRS that are surprisingly simple. As such, they’re something that you’ll need to pay a particular amount of attention to when you’re filing your tax returns.
While not all of them may be relevant to your personal position, they’re still worth noting in case they apply to you at some point in the future. As they’re somewhat of an easy mistake to make, if you happen to make any of these mistakes, you may be able to avoid too harsh a penalty, if any, by using tax resolution services, which can end up being extremely beneficial no matter what mistakes or errors you make when filing your taxes.
Not Declaring Tax On Winnings
This is something that many people may not do, as many people don’t realize that they need to pay taxes on any winnings they may receive. This is applied no matter whether it’s a sizable bet on a horse racing competition or winning the lottery. The IRS treats any winnings that you may get as an income. As such, they subject these winnings to the same taxes that they would with your traditional income. Because of this, it’s worth ensuring that you pay taxes on any of these winnings. While how much you’ve won may be relatively little, the fines that you may have to pay should you get caught can end up being significantly more. With that in mind, you’ll end up saving what could be quite a large sum of money in the long-term.
Underpaying Taxes
While underpaying your taxes is an obvious way to get on the bad side of the IRS, it can be surprisingly easy to do so. Much of this can be because filing your taxes can be somewhat confusing, especially if you run your own business or are self-employed. If you’re filing your taxes yourself and don’t rely on an accountant, then it can be relatively easy to make a mistake when calculating how much taxes you should pay. Furthermore, it can also be somewhat easy to overstate how much exemptions, etc., that you may be entitled to.
These can all come together to wind up creating somewhat of a large tax bill that you’ll need to pay. However, as easy as it is to make this mistake, it’s also surprisingly easy to avoid. To ensure that you’re paying the right about of tax, and in a timely manner, it’s vital that you keep abreast of all the tax information that you should be aware of. Furthermore, you should always triple-check your statements to ensure that you’ve come to the right tax figure.
Applying For Too Many Exemptions
Everyone wants to take advantage of the tax exemptions that they may be eligible for. However, it may not always be clear as to which exemptions you can apply for. As a result, it can often be the case that people over-apply for exemptions, which can end up causing quite a bit of hassle. However, this is also something that can be quite easy to avoid. This is best done by researching all of the exemptions you’re eligible for and making sure that you only apply for them. As such you’ll ensure that you’re paying the right amount of tax and that you’re not attempting to claim back money that you’re not entitled to.
While there are a variety of ways to get into trouble with the IRS, whether intentionally or not, the majority of us are able to ensure that we don’t cause any problems. As such, the majority of us are aware of how we should file our taxes and what we should include with them. With the above, however, there can be several things that can easily be overlooked and cause significant problems with the IRS at some point or another. As such, you should always ensure that you pay a great deal of attention to everything you’re doing when you’re filing.
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