| It sounded so good...The promise of a large tax refund | | | | legitimate. |
| can be very seductive. But like anything that seems | | | | Business Deductions: This one trips up the small and |
| too good there is usually a catch. During my time with | | | | independent business owners all the time. The IRS is |
| the IRS we would look for large tax returns that could | | | | picky about what is considered a business expense |
| be audited. So what can you do to make sure your | | | | and what is personal. If you're buying equipment or |
| tax refund doesn't turn into a tax debt? | | | | office furniture make sure to keep the receipts. You |
| Simple mistakes...There are a few common deductions | | | | also have to prove that the purchases are important |
| and credits that get people into trouble when they file | | | | to the running of the business. For example, buying |
| them on their tax return. I would like to go over a few | | | | extra computers for a growing staff is a legitimate |
| of the most common ones with you to make sure you | | | | write off. However purchasing an antique desk for |
| can avoid the common mistakes far too many | | | | your office because it impresses clients is considered |
| Americans make. | | | | a luxury and does not qualify as a business expense. |
| Child tax credit: This is one of the most common. | | | | The same holds true for travel expenses. Again, not |
| There are a couple of requirements that you have to | | | | only do you need your receipts you need to prove |
| meet and prove to the IRS before you can claim a | | | | that the travel expenses are for business purposes |
| child as a dependent. First the child must be related to | | | | only! |
| you in some way, or you are the child's legal guardian. | | | | And that's not all...I want to make you aware that |
| Second you must prove that you took care of the | | | | these are only a few examples of potential deductions |
| child for six months of the tax year in question. | | | | or credits that can turn a tax refund into a tax debt. |
| Charitable Donations: When I talk about charitable | | | | When trying to claim any deduction or credit always |
| donations I'm not talking about the clothes you donated | | | | make sure that you have receipts and other |
| to the thrift store. I'm talking about big donations. If | | | | documentation to back up your tax return. And use |
| you've made a charitable donation of more than | | | | common sense; if you have any doubt about claiming |
| $500.00 you have to not only have a receipt, you have | | | | something; do the research and make sure before you |
| to have a signed document from the organization that | | | | send in your tax return. |
| you donated to proving that your donation was | | | | Now you have the smoking gun...Use it! |