On the Friday before Christmas, I got a wild hair and decided to replace the flooring in my bathroom. Since I have never done any type of flooring in the past and have no idea how to do it, I figured I would just do it myself. So armed with both inexperience and a scary lack of knowledge, I dove right in! The project had many bumps along the way including starting completely over at one point. I made mistakes along the way and so some spots don't look quite as good as I would have liked. After putting in 21 hours over my Christmas break, I finally finished the project. Overall it looks good, and I am happy with it and oh so glad to be done! .
It might seem like obvious advice, but there are people that still make mistakes about reporting income.
If you get a form telling you how much you earned, the IRS also gets a copy of that form. It doesn't matter if it is for wages, interest, capital gains, rent, or something else - the IRS also gets a copy. That means if you don't report at least 100% of the amount shown on the forms you receive the IRS will know you underreported.
Any given individual income tax return has only a .84% chance of being audited by the IRS. That's equal to 1 return out of every 119. The odds seem pretty favorable, but those numbers are for the entire spectrum of income earners.
The There is a tax gap in the United States. Every few years the IRS does an analysis of overall compliance with federal tax laws and uses that information to estimate the annual shortfall of revenues. That shortfall is known as the tax gap, and the most recent estimate put that amount at well over $450 billion. (Yes, "B"illion.) Through enforcement efforts (like audits) the IRS typically recovers about $50 billion per year, but with a gaping difference between the shortfall and collections you can understand why they are eager to enforce where they can.
One of the most common mistake people make with their taxes is only starting to think about their taxes after the year is over. After all, who wants to think about taxes during the holidays!? The problem is that tax returns are just a summary of your year and once your year is over, there isn't much you can change.
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