Audit Risk: 3 Mistakes you need to avoid to minimize the audit risk and get your financials in line with the general requirements.
The auditor is always available to help reduce the audit risk of your financial return
It’s that time again of the year when you must update your tax filing status? We will write below about the top 3 mistakes in tax filings that you should avoid. If you make errors like filing the wrong tax status, you could end up paying more taxes. A tax audit could also be possible if you make mistakes in your tax returns. The auditor is always available to help if necessary.
The audit risk when refuse to file a return.
When it comes time to file their tax returns, some people prefer to keep their heads down. If you miss the deadline, you could be subject to penalties and interest. If you really have difficulty paying your bills, contact the authorities.
Sometimes people file returns, but they fail to do so because the threshold is too low. Keep in mind that thresholds may vary depending on your status and age. Double-check your tax situation to ensure you aren’t liable.
Audit risk of wrong tax filing status.
These five statuses will be required to submit your tax returns.
- Single
- For married couples, joint filing
- Separate filing is for married couples
- Head of the household
- Qualifying widow/er and dependent child
YOUR TAX FILING STATUS WILL DETERMINE THE TAX RATE THAT YOU PAY.
If you select the wrong status, you could end up paying more taxes. If you fall in more than one category, you have the option to choose a tax-free status. For example, a single parent would be eligible for a higher standard deduction or lower tax rate if filed as a head, household member, etc.
Tax deductions are not available to you and audit risk.
There are many deductions and credits that you can claim when you file your tax returns. It is easy to forget about some of the deductions that are available. This means that you will end up paying more taxes than what you need and the authorities won’t be quick to refund it.
A professional can help you ensure that you only pay what you owe in tax and can help you determine the best tax filing strategy and find any deductions or credits that you may have.
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