You worked all year in Alabama, and now it’s time to file your taxes. While preparing taxes can be a confusing and burdensome process, the last thing you want to do is make a big mistake on your return. Common tax mistakes, even when they aren’t intentional, can result in charges for tax fraud.
Mistake No. 1: Forgetting to report side income
If you get a W2 from your boss, reporting income from your day job might be easy. However, you need to report all of the income you received from your side jobs as well, even if gathering the necessary information is not so straightforward. If you’re a tipped employee, tip income also needs to be reported.
Mistake No. 2: Claiming deductions for personal expenses
Deductions for business expenses can help to lower your tax burden, but don’t make the mistake of deducting too much. If you brought your family along on a business trip, for example, their restaurant tabs do not qualify as business expenses.
Mistake No. 3: Trusting the wrong tax preparer
The person or company that you trust to prepare your taxes could get you into big trouble if you’re not careful. Some unscrupulous tax preparers will try to claim the Earned Income Tax Credit for customers who don’t qualify for it, just because it will get them a bigger fee.
Get help if you already made a mistake on your taxes
Under criminal law, individual penalties for tax fraud can include fines of $100,000 and years in prison. If you believe that a mistake on your tax paperwork triggered an IRS audit, you may want to get help from a criminal defense attorney. An attorney may be able to help mitigate the situation with the IRS before any criminal charges are filed.