Skip to Main Content

MISSED THE DEADLINE? WE'RE STILL OPEN

MISSED THE DEADLINE?

Call now
Liberty Tax logo

THIS SITE USES COOKIES FOR PERSONALIZATION AND TO PROVIDE THE OPTIMAL USER EXPERIENCE AND CONTENT. CLICK ACCEPT TO OPT INTO THIS ENHANCED EXPERIENCE.

5 COMMON MISTAKES THAT WILL GET YOU AUDITED

Tax season can be a daunting time, but having the proper knowledge can make the process easier.

jennifer berger and taxes

Source: Maya Lanzone, Freelance Consumer Reporter, The Sun

Published: 7:00 ET, Jan 21 2024 | Updated: 16:28 ET, Jan 19 2024

TAX season can be a daunting time, but having the proper knowledge can make the process easier.

The Internal Revenue Service (IRS) will officially begin accepting and processing 2023 tax returns on Monday, January 29 but before then, there are several steps and tools to make it less stressful. Taxpayers should note that the IRS's free filing portal opened on January 12. IRS Free File is only available to taxpayers who made $79,000 or less in 2023. Those without access to the portal can officially start filing their taxes on January 29. This year, federal taxes are due on April 15.

To help you better prepare for tax season, The U.S. Sun interviewed a tax expert to offer valuable insights and practical tips for ensuring a smooth filing process. Jennifer Berger, a tax preparer of over 10 years and owner of Liberty Tax Service, is a tax professional. She shares financial advice with her over 117,000 followers on TikTok (@jenndoestaxes), and she spoke with The U.S. Sun to provide helpful information for taxpayers.

ONLINE RESOURCES

Berger first explained some helpful online tools that taxpayers can use to make the process easier. She recommends that all taxpayers get familiar with IRS.GOV, as the website provides a wealth of information as well as the most up to date IRS press releases. She also points out that the IRS has an Interactive Tax Assistant that can answer tough questions and help you to navigate the tax code if you aren't familiar with certain topics.

Berger notes that although there are many free and low cost options online for filing your taxes, there are some instances in which you might consider hiring a tax preparer. "If you are looking to save money on taxes, learn how things affect your tax liability so you can keep more money in your pocket and use tax planning/tax strategies to increase your refund or lower your balance owed, and be confident that your return is filed correctly, then I would 100% recommend working with a reputable tax preparer," Berger said.

COMMON MISTAKES

The next topic that Berger delves into is common mistakes that get taxpayers audited by the IRS. She notes the five top reasons why people get audited.

1. Forms: Not filing all of your forms on your return.

She said that you must include all W-2s and other tax forms you received for the tax year when you file. "Do not use your paycheck to file your taxes unless it is after February 28th and you file a paper return with a substitute W-2," she added.

2. Filing Status: Filing the incorrect filing status.

You must file as Married Filing Joint or Married Filing Separately if you are legally married or recognized as common law in your state. If you are married, it is against the law to file as Head of Household if you lived with your spouse at all during the last six months of the year. "I have seen a rise in audits regarding this in the last few years," Berger notes. You may only file as Head of Household if you did not live with your spouse at all during the last six months of the tax law, you are claiming your dependent children, and you pay over half the cost to keep up the home.

3. Ineligible Child Claims: Claiming a child on your tax return that is not eligible.

"Your dependent must be your biological child, step-child through marriage, niece/nephew, grandchild, or sibling in order to qualify for the Child Tax Credit and Earned Income Credit," said Berger.

4. Fake Businesses: Filing a fake business to increase your tax refund, lower your tax liability, or claim fake expenses to reduce your taxes owed.

"The IRS announced that they are hiring hundreds to thousands of new IRS agents to process and verify all cash businesses that are claiming Earned Income Credit and Child Tax Credit in an attempt to reduce the overwhelming amount of fraudulent filings."

5. Personal Deductions: Excessive personal itemized deductions on the Schedule A form.

Berger lists medical out of pocket costs, real estate taxes, charitable contributions, and gambling losses as examples. 

EFFECTIVE TAX PLANNING

Berger notes that there are a few things you can do throughout the year to make the filing process smoother. She says that staying on top of your W-4 is paramount if you have a W-2 job. "Recognizing changes in your household like increase or decrease of income, the addition of second jobs or cash businesses, gaining or losing dependents, and the ages of those dependents, as well as your marital status."

She suggests reviewing and reporting and changes to your employer so they are not holding out too much tax or too little tax from your paychecks. Berger also notes to never go exempt on your W-4. "Doing this could put you in a situation where you owe the IRS and can be subject to not only penalties, but also wage garnishments and levies on your personal property if the amounts go unpaid."

Another piece of advice she offers is to take advantage of tax deferred programs such as 401Ks, as they can help you to position yourself to owe less money at tax time or increase your refunds by up to thousands of dollars. Lastly, she suggests keeping your personal and business expenses separate if you are a business owner and keeping all your receipts.