Do you have a lot of medical bills that you pay on each month? Could those medical bills be deducted from your tax bill this year? I was helping my mother take care of all of her finances after my dad passed away. I didn't realize how many bills she had coming in each month for medical treatments that my dad had undergone months, even a year earlier. I started doing some research about medical bills and tax deductions. If you have medical bills, take a minute to read through this blog to gain some knowledge that can help you decide what you can do when tax time comes around.
It feels as if tax season is always just around the corner. One of the biggest fears during tax season is that of the audit. Nobody wants to have their finances scrutinized, especially if it means they could end up paying more money. These tips will help you avoid an audit next year.
1. Keep close notes about side income.
Remember that you are required to note more than your salary when you pay your taxes. Accuracy is the key. This means that in addition to filing your W-2, you must also file a 1099 for each form of side income. If you do not receive the necessary documents in the mail, you can still include information as necessary.
2. Keep close records of business-related travel.
If you intend to file your taxes and include your vehicle as a deduction, ensure that you are keeping close records. It is also important that you recognize the rules surrounding deductions for your car. For instance, the mileage you use to get to work and home each day is not deductible. On the other hand, you may be able to use this deduction if you are a freelancer and you use your own car to visit clients or to fulfill work-related tasks. Keep a mileage log in Excel to be sure you are providing accurate information you can back up.
3. Keep scans of your receipts on the computer.
You no longer have to worry about losing receipts. You can now scan those documents and keep them in case you file for business or medical expenses. The earlier you do this, the better. Receipts can become difficult to read over time. Including only specific amounts can help you avoid an audit.
4. Work with a tax professional who files online.
You do not have to do your taxes on your own, and you certainly do not need to have them on paper anymore. A professional can file for you online with ease. Those who submit paper taxes are more likely to make mistakes, often because of the process of doing the math. It is easy for you or a tax professional to make an error in math, but submitting electronically allows the computer to do the math for you.
Ultimately, the chances of facing an audit are relatively low. If you are honest about your taxes and include as much accurate information as possible, you are not likely to face problems. A tax professional, like one from Vlasac John M & Co, will have additional solutions to keep you from facing a dreaded audit.
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