Posted by Nancy Hecht, CFP®, AIF®
Who doesn’t love tax time! So many colorful thoughts and words come to mind. Here are some RED flags for you to avoid so you do not spend any extra GREEN:
- Making simple errors can cost you such as math errors or forgetting to include necessary forms.
- Inflating you charitable deductions can raise the red flag. Being charitable is wonderful on so many different levels but remember this, many charities report donations received to the IRS. Also, if your charitable donations seem significantly higher than those in your tax bracket, you will attract attention.
- Not facing the fact that it is a hobby, not a business. If you cannot be profitable 3 out of 5 years, your business may be deemed a hobby by the IRS.
Take your time while compiling your tax return, so you keep all of your green.