Charitable giving is important all year 'round, but it's often this time of year when we receive the vast majority of solicitations. Why? Well, charities know that if you're in the position to itemize, you may be looking for a few more deductions to offset some gains and bring your entire tax bill down.
This time of year, tax audits are on everyone’s minds as we rush to compile financial paperwork and sit down for the task of completing our annual income tax returns. The ominous threat of the tax audit lurks in the background, waiting to jump out like a boogeyman if we make a mistake or miscalculate our tax liability. One of the reasons why so many people are nervous about a tax audit is because we have some ideas in our minds that might not be totally true, urban tax audit legends, if you will.
If you surveyed the average American about what they fear most, a tax audit is probably near the job of the list, just after natural disasters. Tax audits are a fact of life for many, particularly those who have significant assets or who own a business. And, in reality when faced with a tax audit it can be less frightening than it is from a distance, since it is often easier to tackle a concrete set of problems than to worry about a nebulous threat.
Finding out that you are being audited by the Internal Revenue Services is a frightening experience. Even if you think you've done everything correctly, tax laws are extremely complicated. It's easy to make a mistake unknowingly. However, the IRS is not infallible as we have seen in recent events. Sometimes auditors make mistakes too.