Despite the agency’s fearsome image among some taxpayers, agents with the Internal Revenue Service are regular Joes, just like you and me.
There’s no mystery to keeping a relationship with the IRS cordial. All of us, including the IRS, know the U.S. Congress has saddled the American people with an immensely complicated tax code, because democracy is a bit of a messy process. A little twist here, a lot of changes there and before you know it we surely have created one of the most complex tax codes in the world.
On the other hand, technology has simplified the process of recording expenses. Did you know with a simple swipe of a credit card a tax-deductible charge may be instantly recorded? Innovative software solutions have removed much of the burden in tracking and recording tax-deductible expenses, particularly for the small or micro business owner.
The two keys to avoiding an unexpected tax bill are to ensure your deductions and reported income are accurate and to have your tax records and receipts organized and accessible should the government choose to conduct an audit. Uncle Sam is not going to take your word for it. The agency rightly expects documentation for every deduction you claim.
Be sure to claim appropriate deductions on state income tax returns, too. State coffers have been drained from a lengthy recession and state audits have been on the rise for several years.