This Could Be the Most Important Rule to Follow When Filing Your 2023 Tax Return

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Gearing up to file for your 2023 taxes? Read on for one way to stay out of trouble with the IRS. [[{“value”:”

Tax season is now underway. And whether you’ve just started to gather your paperwork or are almost ready to file your taxes, there may be the nagging fear in the back of your mind that your return is going to wind up on the IRS’s audit list.

In reality, tax audits aren’t always such an ordeal. Most of the time, when the IRS audits you, all you really need to do is submit documentation backing up your claims. The idea of an IRS agent coming into your home, ransacking your office, and grabbing your bank account statements before you can shred them is something you might see play out in a movie, but it’s unlikely to happen in real life.

Still, you may be eager to get through the tax-filing process without an issue. And following one simple move could make that possible.

Be honest and accurate with your taxes

Mark Steber, Chief Tax Information Officer at Jackson Hewitt Tax Services, has been in the tax business a long time. And he says that if you want to avoid trouble when filing your taxes, being honest and accurate is the way to go.

“I see many people assuming if they’re ‘close enough’ that it won’t cause any issues,” Steber says. “But that couldn’t be further from the truth. Accuracy matters. This is especially true when reporting income.”

There are two areas where you have the potential to be dishonest and inaccurate when filing a tax return:

Your incomeYour deductions

As far as your income goes, keep in mind that whether it’s interest from your bank or freelance wages, those details are usually documented in a 1099 form. When you get a 1099 form, so does the IRS. So if you’re thinking of hiding the $800 you got for a freelance project you did last June, think again. There’s a good chance the IRS will find out you earned that money, so you might as well report that income accordingly.

Similarly, it’s OK to claim deductions on your tax return that are accurate and legitimate. If you’re a freelance web designer and you bought a new laptop for work, go ahead and claim it. But don’t guess at that deduction and claim $1,200 when the laptop cost $1,192. Instead, find the receipt and report the correct number.

Also, don’t say that a given expense was business-related when it wasn’t. If you take a trip to visit a friend across the country, don’t claim your flight and hotel room as a business expense. If the IRS asks for documentation of your travels, you could be in for a world of trouble.

A good way to avoid a hassle

Getting audited isn’t the end of the world. But if you can avoid it, why not?

One of the easiest ways to avoid an issue with the IRS is to file a return that’s truthful and spot-on. And if you’re still not convinced, remember that if you do decide to blatantly lie or guess at deductions, you’re likely to get caught. And that could result in costly penalties you’d no doubt rather avoid.

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