Phil's Personal Finance Tip of the Day:
Filing Your Taxes? 7 Things to Check First
By Eva Rosenberg | MarketWatch
If you’re not checking your tax return before it gets sent to the IRS, you could be in for some nasty surprises.
Did you find a tax pro who swears she can get you better refunds than anyone else in the world? Do all her clients get great refunds, and you can’t figure out why you and your accountant can’t get the same result? Is she smarter than everyone? There’s a reason she can do this. She’s committing tax fraud. What happens when your tax preparer commits tax fraud? You get into trouble.
Consider the case of someone who is being audited because her tax preparer took deductions for business expenses. She can’t provide receipts for those expenses because she doesn’t have a business — or any such expenses. She is rightfully nervous. By the time the IRS gets done with her, she will owe the taxes on those fraudulent expenses, several types of penalties — and interest on the whole shebang.
The first thing you need to know about any tax return you sign is this — there are some words over your signature:
“Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.”
Read your entire tax return. Don’t put up mental walls and blinders. You are responsible for what goes into those pages. When you see something that you don’t understand — ask. If your tax preparer refuses to provide answers, or to let you see your tax return before it is e-filed, take your papers and records and leave.
These seven steps will help you prepare your own tax return properly — or to catch your preparer’s errors or fraud.
Names
All names should match the Social Security cards, where the IRS cross-references all names. One client told us we had spelled his first name “Jeffrey” incorrectly. We had used the spelling on his Social Security card, which was “Jeffery”. When he looked closely, he saw that his Social Security account had been set up with the wrong name from day one.
Did you get married without changing your name with the Social Security Administration? Use your single name.
Check the name appearing on all Forms 1098 and 1099. If you have a living trust, make sure you transferred all your assets to that trust. You will know if the forms don’t show the trust’s name.
To read the entire article from Eva Rosenberg | MarketWatch:
http://finance.yahoo.com/news/filing-taxes-7-things-check-120042091.html;_ylt=AsLalyYKPMatZG5VWMvtLKWiuYdG;_ylu=X3oDMTN0aXU5MzVkBG1pdANWYXJpYWJsZSBNb2QEcGtnAzVjYTI5NzdhLWQyZjctM2IxOS1hYzJhLTExM2M2MmUxM2E1NwRwb3MDNQRzZWMDTWVkaWFTZWN0aW9uTGlzdAR2ZXIDMjk5MjlkOWQtODI4Mi0xMWUyLTlmYmYtZDQ1YTM1ZDM2N2M2;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3
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