What Not To Do On Your Taxes According to Experts

Being careful is import when completing your taxes and this year should make you a little bit nervous if you are preparing your taxes yourself. Even professionals are making a lot of mistakes according to the Government Accountability Office.

In a study done in 2014, 10% of preparers did not calculate a normal tax return correctly. The final error rates for tax preparation according to the study was 50% for self-prepared returns and 60% for professionally prepared returns. Of course, the professionals more than likely handle the tough returns. Still, those are alarming numbers.

Some errors are obvious mistakes while others are harder to deduct, keep these difficult areas in mind this tax season: foreign investments, charitable giving, real estate taxes, gambling winnings, and state refunds.

If you have foreign investment accounts or savings accounts, make sure to report them to the IRS. If the IRS is able to discover the account later, you can face a penalty up to $10,000.gaooffice

When making contributions to charity, keep a record so you can prove that you gave to a qualified charity. And when purchasing an item for a charity event, you can only deduct the portion above the value you are receiving.

Real Estate taxes can be a trick if you just purchased the home as some are paid on the closing statement. And an office in the home is a great deduction, but make sure not to claim more space than the office occupies.

If you have gambling winnings during the year, offset those winnings with loses you experienced and documented. You can’t take a lose of gambling, but limiting the amount of your winnings that is taxable is really nice.

Finally state refunds. State refunds on tax return filings are taxable the next year as income on the federal return. Yet federal tax refunds are not taxable, you get to keep the full amount of those funds.

 

 

A Recent Poll Shows Popularity Of The Millionare Tax

Most people agree with President Obama’s plan to require millionaires to put a significant amount of their income toward their 2012 taxes. However, the same people would prefer to see a cut in spending rather than a millionaire tax to help balance the federal budget. These results come from an Associated Press-GfK Poll.

The survey shows that Obama’s millionaire tax plan has a lot of support. However, his plan has not changed people’s opinions on how to bring down the budget deficit. United States deficits have been larger than $1 trillion dollars a year. Sixty-five percent of the people polled agreed with President Obama’s plan to tax millionaires at a rate equal to 30 percent of their income. According to the poll, only 26 percent of those surveyed were against the idea.

Interestingly, 56 percent of those polled preferred spending cuts rather than hikes in 2012 taxes to fix the budget. Thirty-one percent of those polled preferred tax hikes. This same question was asked a year ago, and the response changed only slightly.

The poll further showed that the majority of people have a more favorable view of Democrats than they do of Republicans. This should be good news for President Obama as we enter election season. According to the poll, 54 percent of those surveyed gave the Democrats good ratings and 46 percent of those surveyed gave Republicans favorable ratings.

Although Obama has little chance of having his proposal passed by Congress during the campaign season, it serves as a Democratic rallying cry. It also shows a stark contrast between Democrats and Republicans who would like to lower the tax rate for millionaires. It will be interesting to see how these issues are approached during the election.