The IRS is responsible for making sure that people are paying their taxes on time and in full. Taxes fund many things essential to maintaining an enjoyable life, so it is important that taxes are being paid. Getting in trouble with the IRS can lead to a bad reputation and many negative repercussions, so you should try to avoid it at all costs.

Track Expenses

In order to prevent tax fraud, the IRS is looking for clear documentation of expenses and how you use your money. Because of this, it is important to track your expenses meticulously. It is especially important to track deductible expenses. Deductible expenses are those that can be taken out of your taxes, so the IRS especially wants legitimate proof of those expenses. Make sure to keep receipts and digital copies of expenses for the time outlined in IRS guidelines.

Pay Taxes on Time

Because the IRS is tracking down those who are trying to evade paying some or all of their taxes, paying your taxes on time will help you stay out of trouble with the IRS. Make sure that you are acutely aware of tax season and hard deadlines. Some employers make paying taxes on time even easier by offering tax withholding. This means that they will withhold a certain amount from paychecks that is meant to pay off taxes. If you are an employer, tax withholding is a critical part of managing payroll. Make sure that any money retained through tax withholding is promptly paid off for taxes.

Avoid Overreporting Expenses

A common mistake many people make when filing their taxes is overreporting their expenses. This can look like reporting personal travel expenses as business expenses. In order to avoid mistakes such as these, make sure that you are very specific when accounting for your expenses. Instead of thinking of any trip just as “a trip,” make sure to differentiate between personal travel and business travel. Suspiciously high amounts in any one category may alert the IRS to possible fraud, but being explicitly clear about your expenses will help you avoid this.

Taking the time to properly file your taxes can be tedious and confusing at first. However, the extra time is well worth it if it will help keep you out of trouble with the IRS. Avoiding trouble with the IRS will help you remain an honorable, full-tax-paying citizen in the eyes of the law.

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