Updated on February 16, 2024 by David Korpel
I’m sorry to inform you that ENGAGE CPAs won’t be able to handle your 2023 tax return. Yes, you heard that right. Our calendar is packed, and we’re officially zipping up the tax files for this year—unless you’re eyeing an extension. If that’s the case, Nate’s your man. Seriously, he loves those calls. It’s going to be a May to remember…
But if you’re embarking on your 2023 tax journey without a CPA by your side, kudos for taking the reins! As you navigate the maze of deductions, credits, and IRS guidelines, we’re here with some pro tips to ensure your journey is smooth and audit-free.
I’ve got some advice that might just save you from becoming part of the dreaded 0.38% (in 2022) IRS audit club. Trust me; it’s a club you’d rather not join.
Let’s Talk Income
Figuring out which income the IRS knows about (and which it doesn’t) can feel like playing a game of financial hide-and-seek. Thanks to all those W-2s and 1099s flying around, the IRS is trying to match what they know with what you report to them on your tax return. It’s like a puzzle, but not the fun kind.
You might think, “Hey, the IRS loses paperwork; maybe I can ‘forget’ to report something.” Hold up—let’s not go down that path. It’s tempting to test the waters, but the IRS has a knack for catching even the smallest fish in the sea of tax returns. Skipping out on reporting income is like sending the IRS a “Wish You Were Here” postcard; trust me, they’ll RSVP with an audit letter.
So, keep it clean, report all your income, and let’s keep those audit letters as nothing more than a myth.
Deductions: The Proof Is in the Pudding
When it comes to deductions, it’s like telling fish stories—stick to the ones you can prove. Being generous on your tax return might feel good, but let’s keep those charitable contribution numbers realistic. The IRS wasn’t born yesterday. They’re pretty sure that bag of clothes you dropped off isn’t the equivalent of a luxury car donation, and they’re fairly certain you didn’t give away 35% of your income to charity. After all, you’ve got bills to pay and, presumably, a life to live.
Holding onto your receipts and records for about seven years is like keeping a good alibi; it’s crucial if you ever need to prove your case during an audit. If you can’t back up those deductions, they’ll vanish faster than ice cream on a hot day.
Rounded Numbers: Too Smooth to Be True
Sure, rounded numbers look sleek—clean, even. But the IRS raises an eyebrow when your tax return looks like it was filled out by someone who only loves zeros and fives. It’s rare for a business to have numbers that wrap up as neatly as a sitcom plot. Income exactly $100,000, with advertising at $20,000 and wages at $80,000, leaving you with a perfectly rounded $0 taxable income? The IRS has a hard time believing in such coincidences, and they’ll dig deeper, assuming there’s more beneath the surface.
So, let’s keep it real. Precision in your numbers shows you’re paying attention and not just taking a creative writing approach to your taxes.
And remember, if the thought of extensions sparks joy after hearing all of these tips, Nate’s practically waiting by the phone for your call.
