Tax Season Software or Tax Professional? How to Make the Right Call

We’re right on the cusp of tax season, which means you’ve got a choice to make: Will you file with a tax season software program, or call on a tax professional?

I know I may seem biased on this topic. But as the tax pro in your corner, I want you to go the route that makes the most sense for YOU. My goals for you are big-picture: A peaceful tax season and sustainable financial health. 

And because your tax situation is unique, I can’t prescribe a black-and-white solution here. But I will do the heavy lifting of supplying the facts for you – and I’ll let you make an informed decision from there. 

Tax Season Software 
You know about TurboTax (thanks Super Bowl commercials). You know about H&R Block (there’s one on many-a-block). You may even know about the IRS’s Free File program. Many of these software programs are appealing because they’re “free” — or close to it. In a tough economy where taxes are burdensome, that can be appealing.

Using software for tax season can be appealing if you…

…are on a tight budget. Many “free” programs exist and if you do have to pay, it can be “cheaper” than paying a professional tax practitioner. Simple return filers will especially find this appealing. 

…want to DIY. You’re able to personally enter your income, deductions, and credits.

…want schedule flexibility. You can work on your return whenever it’s convenient for you. And some programs include on-demand support for when you hit tax-jargon overload. 

The caveats
But of course, software has its shortcomings — that’s one of the reasons people get on my calendar. If you’ve got any complications to your tax situation (like multiple income streams, less conventional deductions, or estate, trust, or gift taxes, for example), software costs increase and can miss things. 

If you’re trying to strategize how to pay less on taxes or just make smart tax moves, you’re on your own. These programs don’t get well enough acquainted with you to find lesser-known credits you could claim, find income sources you need to report, and they don’t advise you on the long-term impact of your decisions. They’re strictly concerned with compliance.

And maybe the biggest red flag: Software is only as good as the information you give it. Because you’re human, you might make simple (but costly) mistakes, and your tax software won’t stop you because it doesn’t know to look out for those. 

Tax Professionals
Getting help from a professional preparer (like my Mauriello Enterprises team and me) can improve your tax season experience in a lot of ways. You will benefit from certified tax help if you…

…have a complicated tax situation. Tax preparers stay current on the ever-changing tax regulations that can turn your tax situation upside down, and your complicated return isn’t a problem for us. From family tax dynamics to unexpected life changes, we can show you the most tax-savvy course of action (with all the possible credits and deductions). That’s what a good tax pro lives for.

…get stressed by taxes. By working with an expert, you get the confidence that your return will be accurate and compliant. As qualified tax preparers, we can save you hours of mental (and emotional) energy spent inputting documents and deciphering forms. You’ve got life demands to take care of. Let us do what we do best.

…want guaranteed protection. Should you get audited, a tax expert can defend you before the IRS. As licensed preparers, we have a special tax pro direct line with the IRS and know IRS-speak. We can help you mitigate penalties and determine the best course of action. 

The “drawbacks”
Will you have to pay for our services? Yes. And that amount fluctuates depending on the complexity of your return. But while you may “save” with free software on the front end, you may not actually save in the end-end. I’ve seen people walk through the door time after time who trusted the DIY method and ended up floundering and missing opportunities to save on taxes.

Is there the real possibility that the tax professional you choose can make errors? Of course. Errors are possible. But those errors are mitigated by doing a review of the tax return – like Santa Claus, we’re checking yours twice.

And of course, there are bad apples to watch out for. But this isn’t cause to ditch tax preparers entirely – it’s just a call for exercising caution. Look for a tax preparer who, at the very least, is available year-round, has a credible history, and has a valid Preparer Tax Identification Number. (For the full safety checklist, check out the IRS’s tips for choosing a tax professional.) 

So… how do you choose?

Ultimately, it comes down to your circumstances and preferences. Before you decide, think about…

1. How complex your tax situation is. Just working with a single W-2 and no deductions? You might benefit from going the tax season software route. But even then, you won’t get the personalized advice you need for maximizing credits and deductions, or for making smart tax moves for the long run. 

2. How much time you’re willing to give. The IRS estimates it will take you about 13 hours to file Form 1040. 

3. How much expertise you have. Maybe you’ve filed your own return in the past and your tax situation hasn’t changed much in the past year, so you feel comfortable going the DIY route. It’s still wise to put your financials into expert hands – tax regulation can change at the drop of a hat, and you can easily miss out on big tax savings opportunities that a pro would be able to help you with. 

 

This isn’t about figuring out which way is better – it’s about figuring out which way is best for YOU. That’s something only you can decide. My honest advice is to really consider all the factors involved here. This is your financial well-being you’re dealing with – it shouldn’t be handled lightly. 

And if professional help is the right move for your financial well-being this tax season, then let’s chat:  Schedule a time today.

To your financial wellness,

Mike Mead, EA, CTC

How to Leverage Your Adjusted Gross Income for Bigger Tax Savings

 

Adjusted Gross Income (AGI): Your gross income, adjusted by payments like retirement contributions, student loan interest, health savings contributions, etc. (And, the IRS’s starting point for calculating how much you owe them every year).

I’m getting right to the point here, I realize. That’s because it’s a foundational part of filing your 2024 taxes. And, it’s my job to point you toward allllll the tax-smart opportunities (aka – credits and deductions that could make your wallet a little bit fuller).

How do you calculate your adjusted gross income?

Start by adding up all your income sources: Wages (check your W-2s or 1099s), tips, interest, capital gains, business income, retirement income, self-employment income, and anything else you can think of (I’ll spare you the exhaustive list – the IRS has already made one).

Then, from that total income, subtract any above-the-line deductions (again, the IRS's list, not mine):

Alimony payments (aka, payments to an ex-spouse)

Educator expenses up to 300 dollars (or 600 if your spouse shares your educating passion)

Certain business expenses of reservists, performing artists, and fee-basis government officials

Deductible Health Savings Account (HSA), IRA, and retirement contributions

Moving expenses if you’re military

Deductible self-employment taxes (50 percent of the self-employment tax you pay and health insurance premiums)

Student loan interest

Now you have your adjusted gross income — be mindful of special requirements for many of these categories when claiming the amounts. And remember: The smaller your AGI, the bigger the credits and deductions you’re eligible to claim on your return.

Stake your claims

With your calculated AGI in hand, you’ve got two options: Subtract either the standard deduction or itemized (“below-the-line”) deductions to determine your taxable income.

Charitable contributions are one of the big below-the-liners to consider. Though most people claim the standard deduction, if you itemize, charitable deductions are generally limited to 60 percent of your AGI.

Medical expenses apply here too, as long as they exceed 7.5 percent of your AGI.

You can also deduct up to 2.5k of student loan interest you’ve paid. It phases out at an AGI of 75–90k (single) or 150–180k (for married filing jointly).

Traditional IRA contributions may also be deductible if your AGI fits the bill: For 2025, the deduction phases out at 73–83k (single) or 116–136k (married filing jointly).

A low AGI could help you qualify for credits like…

The Child Tax Credit (worth up to 2k per child under 17). It begins phasing out at an AGI of 200k (single filers) or 400k (married filing jointly).

The Earned Income Tax Credit depends on your AGI, filing status, and the number of qualifying children.

Education credits like the American Opportunity Tax Credit (up to 2.5k per eligible student for tuition and related expenses). Phases out at an AGI of 80–90k (single) or 160–180k (married filing jointly). And if this credit brings your tax owed to zero, you can have up to 40 percent of the remaining amount refunded to you (up to 1k).

The Saver’s Credit – a little boost for contributing to your retirement plan . This one phases out at an AGI of 39.5k (single) or 79k (married filing jointly) in 2025.

The Premium Tax Credit helps cover health insurance premiums. Your eligibility depends on your income being 100–400 percent of the federal poverty level (calculated based on – you guessed it – AGI).

Slimming down

The key to maximizing benefits here is keeping your AGI as lean as possible year-round. You have to practice healthy tax habits (just like in life) – like making regular retirement and HSA contributions and harvesting your tax losses.

I’m aware that at the time I’m writing this, you don’t have a whole year to get last year’s AGI in tip-top shape. So how can you slim down your AGI before tax season? (Hint: It’s not with a January juice cleanse. Though, kudos if you’ve tackled that particular improve-your-health strategy.)

Making traditional IRA or HSA contributions can still lower your AGI for the 2024 tax year filing – they count as deductions for 2024 up until April 15th. So, now’s the time to make those contributions a priority.

I get it – all this may look like tax mumbo-jumbo to you. The good news is, that I’ll cover your adjusted gross income with you during your tax appointment. Which, if you haven’t yet scheduled, now’s the time. You’ll have lots more days and times to choose from now than if you wait until March. Schedule your appointment today.

When Medical Expenses Are Tax-Deductible: A Comprehensive Guide

 

Medical expenses can be a significant financial burden for many individuals and families. However, some relief is available in the form of potential tax deductions. The Internal Revenue Service (IRS) allows taxpayers to deduct certain qualified medical expenses on their federal income tax returns, which can help reduce their overall tax liability.

This blog post will explore when medical expenses are tax-deductible, what expenses qualify, and how to claim these deductions.

When Are Medical Expenses Tax-Deductible?

Medical expenses are tax-deductible when they meet specific criteria established by the IRS. To be eligible for deductions, these expenses must fulfill the following requirements:

1. Expenses Must Be Qualified:
   Deductible medical expenses generally include costs related to the prevention, diagnosis, treatment, or mitigation of a medical condition. This can encompass many expenses, from doctor visits and hospital bills to prescription medications, dental treatments, and alternative therapies.
2. Expenses Must Exceed the Threshold:
   To claim deductions for medical expenses, your total qualified expenses must exceed a certain threshold. As of my knowledge cutoff date in 2022, this threshold was 7.5% of your adjusted gross income (AGI). This means you can only deduct the portion of your medical expenses exceeding 7.5% of your AGI. For example, if your AGI is $50,000, you can deduct medical expenses that exceed $3,750 (7.5% of $50,000).
3. Itemize Your Deductions:
   Medical expenses can only be deducted if you choose to itemize your deductions on your tax return instead of taking the standard deduction. Itemizing allows you to list all your eligible expenses, including medical costs, mortgage interest, charitable contributions, etc.
4. Keep Proper Documentation:
   Maintaining accurate records of your medical expenses throughout the year is crucial. This includes receipts, invoices, and any other relevant documentation. If you are audited, the IRS may request proof of your expenses, so keeping thorough records is essential.

What Expenses Qualify for Medical Expense Deductions?

The IRS lists qualified medical expenses that can be deducted from your tax return. While this list is not exhaustive, it covers many common healthcare-related costs. Here are some examples of expenses that typically qualify:

1. Doctor and dentist fees
2. Hospital and nursing home costs
3. Prescription medications
4. Health insurance premiums (if not paid through your employer)
5. Long-term care expenses
6. Medical equipment and supplies
7. Transportation for medical care (e.g., mileage, tolls, parking fees)
8. Necessary home modifications for medical reasons
9. Dental treatments, including braces
10. Vision care, including eyeglasses and contact lenses
11. Mental health services

It's important to note that cosmetic procedures, over-the-counter medications, and general health and wellness items (like gym memberships) are generally not eligible for tax deductions unless prescribed by a doctor for a specific medical condition.

How to Claim Medical Expense Deductions

To claim deductions for medical expenses, follow these steps:

1. Itemize Your Deductions:
   When you file your tax return, choose to itemize your deductions instead of taking the standard deduction. This allows you to list your qualified medical expenses and other itemized deductions like mortgage interest and charitable contributions.
2. Calculate Your Deduction:
   Subtract the 7.5% threshold of your AGI from your total qualified medical expenses. Only the amount that exceeds this threshold is deductible.
3. Complete Schedule A:
   If you use tax preparation software or work with a tax professional, they will guide you through completing Schedule A (Form 1040). This is where you report your itemized deductions, including your medical expenses.
4. Keep Records:
   Maintain all documentation related to your medical expenses, including receipts, bills, and insurance statements. You may need to provide proof if the IRS requests it.

Medical expenses can quickly add up, but the IRS offers some relief by allowing taxpayers to deduct qualified medical expenses that exceed a certain threshold. By keeping accurate records and understanding the rules and regulations surrounding medical expense deductions, you can lower your tax liability and ease the financial burden of healthcare costs.

Remember that tax laws can change, so it's advisable to consult with a tax professional or check the latest IRS guidelines for the most up-to-date information on medical expense deductions.

The Best Ways to Protect Your Inheritance from Taxes

 

Inheriting assets or wealth from a loved one can be a bittersweet experience. While it can provide financial security and peace of mind, it also often comes with a tax burden that can diminish the value of your inheritance. However, you can employ several strategies and methods to protect your inheritance from excessive taxation.

This blog post will explore the best ways to minimize the tax impact on your inherited assets.

1. Understand the Tax Laws in Your Country
   The first step in protecting your inheritance from taxes is to clearly understand the tax laws and regulations in your country or state. Tax laws vary significantly from one place to another, and staying informed about the specific rules that apply to inheritances is crucial. In many countries, inheritance taxes may not apply to smaller estates or may have exemptions for certain types of assets or beneficiaries.
2. Take Advantage of Exemptions and Deductions
   In many jurisdictions, exemptions and deductions can significantly reduce inheritance tax liability. These exemptions and deductions may be based on factors such as the relationship between you and the deceased, the value of the inheritance, and the type of assets involved. Common examples include the spousal exemption, which allows a surviving spouse to inherit assets tax-free in many places, and charitable deductions for bequests to qualified nonprofit organizations.
3. Consider Gifting and Trusts
   One effective way to protect your inheritance from taxes is to utilize gifting strategies and trusts. By gifting assets to family members or loved ones during your lifetime, you can reduce the size of your taxable estate. Additionally, setting up trusts, such as irrevocable life insurance or charitable remainder trusts, can help shield assets from inheritance taxes while allowing you to control their distribution.
4. Plan and Seek Professional Advice
   Estate planning is critical to minimizing taxes on your inheritance. You can create a comprehensive plan that considers your specific circumstances and goals by working with experienced estate planning professionals, such as estate attorneys and financial advisors. They can help you identify strategies like establishing a will, a living trust, or other structures to protect your assets and minimize tax liabilities.
5. Utilize Annual Gift Tax Exclusions
   In many countries, annual gift tax exclusions allow you to give a certain amount of money or assets to others without incurring gift taxes. By taking advantage of these exclusions, you can gradually reduce the size of your estate and lower the potential tax burden on your heirs. Check the current annual gift tax exclusion limits and rules in your jurisdiction.
6. Consider Tax-Efficient Investments
   If your inheritance includes financial assets, such as stocks, bonds, or real estate, consider the tax implications of these investments. Diversifying your portfolio with tax-efficient investments can help reduce the capital gains and income tax you might incur. Consult with a financial advisor to explore investment options that align with your tax-saving goals.
7. Keep Records and Documentation
   Maintaining detailed records and documentation of your inheritance is essential for tax purposes. This includes records of the inheritance's value, any deductions claimed, and any expenses incurred in managing or maintaining the inherited assets. Proper documentation can help you accurately report your inheritance and potentially reduce your tax liability in case of an audit.

Inheriting assets can be life-changing, but you must know the potential tax implications and take proactive steps to protect your inheritance from excessive taxation. By understanding the tax laws in your area, leveraging exemptions and deductions, employing gifting and trust strategies, planning, utilizing annual gift tax exclusions, considering tax-efficient investments, and keeping meticulous records, you can ensure that your loved one's legacy benefits you and your family to the fullest extent possible.

It's always advisable to consult with legal and financial professionals who specialize in estate planning and taxation to create a customized plan that aligns with your specific goals and circumstances.

Maximizing Your Retirement Savings: Investment Taxes Tips for Blue Springs Retirees

 

Understanding investment taxes in retirement

In retirement, understanding investment taxes is crucial. Here are some tips to help you navigate this:

• Different tax treatments: Understand how different investments are taxed, such as capital gains, dividends, and withdrawals from retirement accounts.
• Tax-efficient investments: Consider investing in assets like index funds or municipal bonds, which are often more tax-efficient.
• Tax-loss harvesting: Utilize tax-loss harvesting to offset gains and minimize your tax liability.
• Roth IRA advantages: Explore the advantages of Roth IRAs, where qualified withdrawals are tax-free in retirement.
  By being knowledgeable about investment taxes, you can maximize your retirement savings in Blue Springs.

Tax-efficient investment strategies for retirees in Blue Springs

Retirees in Blue Springs can save on taxes by choosing investments that are tax-efficient. Consider investing in municipal bonds which offer tax-exempt interest income. Index funds are also a good choice as they have lower turnover, resulting in fewer capital gains distributions. Another option is dividend-paying stocks, which are taxed at a lower rate than regular income. Roth IRAs are tax-free when withdrawn in retirement, making them an attractive option for retirees. Tax-loss harvesting can help offset gains with losses, reducing your tax liability. By utilizing these tax-efficient strategies, retirees in Blue Springs can maximize their retirement savings.

Types of retirement accounts and their tax implications

Different retirement accounts like 401(k), IRA, and Roth IRA have varying tax implications. Contributions to a **401(k) are typically tax-deductible, meaning you don't pay taxes on that income until you withdraw it during retirement. IRAs also offer tax benefits, depending on the type (Traditional or Roth). Traditional IRAs give you an upfront tax deduction, while Roth IRAs grow tax-free, allowing you to withdraw funds tax-free in retirement. Understanding these tax implications can help you maximize your retirement savings effectively.

Maximizing tax benefits for retirement savings

To maximize tax benefits for your retirement savings, consider contributing to tax-advantaged accounts like 401(k)s and IRAs. These accounts allow you to grow your money tax-deferred or tax-free, depending on the account type. Additionally, taking advantage of catch-up contributions if you are over 50 can boost your retirement savings further. Diversifying your investments can also help reduce tax liabilities and improve your overall financial security during retirement. Lastly, consulting with a financial advisor who specializes in retirement planning can provide personalized strategies to optimize your tax benefits.

Tax considerations for different investment vehicles

When it comes to your retirement savings, knowing the tax implications of different investment options is crucial. Here are some key points to consider:

• Different investment vehicles, such as 401(k)s, IRAs, and taxable accounts, have varying tax treatments that can impact your overall savings.
• 401(k) and Traditional IRA contributions are tax-deferred, meaning you don't pay taxes on the money contributed until you withdraw it in retirement.
• Roth IRA contributions are after-tax, so you won't have to pay taxes on your withdrawals in retirement, potentially saving you money in the long run.
• Taxable accounts are subject to capital gains tax, which is important to factor in when considering the tax efficiency of your investments.

Understanding the tax considerations for each investment vehicle can help you make informed decisions that maximize your retirement savings in Blue Springs.

Impact of capital gains and dividends on retirement income

Capital gains and dividends can affect how much retirement income you have. Here's why:
When you sell an asset for more than you paid for it, that's a capital gain. And when you receive money from investments like stocks or mutual funds, that's a dividend. Both of these can increase your income, but they also come with taxes. Capital gains are usually taxed at a lower rate than regular income, so they can be advantageous for retirees. Dividends are also taxed, but the rate depends on how long you've owned the investment. Understanding how capital gains and dividends are taxed can help you make informed decisions when managing your retirement savings.

Utilizing tax deductions and credits for retirees

Retirees in Blue Springs can take advantage of tax deductions and credits to maximize their retirement savings. Some ways to do this include:

• Contributing to retirement accounts like IRAs and 401(k)s can lower your taxable income.
• Utilizing catch-up contributions if you are over 50 years old can boost your retirement savings and reduce your taxable income.
• Taking advantage of the Retirement Savings Contribution Credit if you meet the income requirements can provide a valuable tax credit.
• Consider itemizing deductions if it will help you exceed the standard deduction, especially if you have significant medical expenses or charitable contributions.
• Consulting with a tax professional can help you navigate the complex tax laws and ensure you are maximizing your tax savings in retirement.

Estate planning and tax implications for retirees

When it comes to estate planning and taxes for retirees, it's essential to consider how your decisions can impact your loved ones and your finances. Here are some key points to remember:

• Proper estate planning can help ensure that your assets are distributed according to your wishes after you pass away, minimizing potential conflicts among your heirs.
• Understanding the tax implications of your investments and estate can help you make informed decisions to maximize your retirement savings.
• Consulting with a financial advisor or tax professional who specializes in retirement planning can provide valuable guidance tailored to your specific situation.

Hiring a tax professional and financial advisor for retirement planning

When planning your retirement, it’s helpful to hire a tax professional and financial advisor. These experts can assist you in maximizing your retirement savings by providing tailored advice on investment taxes and financial strategies. A tax professional can help you navigate complex tax laws and ensure you are taking advantage of all available deductions and credits. A financial advisor can work with you to develop a personalized retirement plan that aligns with your goals and risk tolerance. Together, they can guide you towards a secure financial future.

Recap and key takeaways for optimizing retirement savings in Blue Springs

In Blue Springs, retirees can optimize their retirement savings by following a few key tips. To maximize your retirement savings in Blue Springs, consider the following key takeaways:

1. Take advantage of tax-advantaged accounts: Utilize accounts like 401(k)s and IRAs to save for retirement while enjoying tax benefits.
2. Diversify your investments: Spread your investments across different asset classes to reduce risk and potentially increase returns.
3. Minimize investment taxes: Be mindful of the tax implications of your investments and consider strategies to minimize taxes.
4. Consult with a financial advisor: Seek guidance from a professional to develop a tailored retirement savings plan that aligns with your goals and circumstances.

By incorporating these strategies into your retirement planning, you can work towards maximizing your savings and achieving a financially secure retirement in Blue Springs.

Tips for Saving Money on Taxes During Retirement

 Retirement is a time when you should be enjoying the fruits of your labor, but taxes can continue to eat into your income even after you've left the workforce. However, with some strategic planning and savvy financial decisions, you can reduce your tax burden during retirement and make the most of your hard-earned savings.

In this blog post, we'll explore some valuable tips for saving money on taxes during retirement.

1. Understand Your Retirement Income Sources
2. The first step in managing your tax liability during retirement is understanding where your income will come from. Familiar sources of retirement income include Social Security benefits, pensions, retirement account withdrawals (e.g., 401(k), IRA), investments, and any part-time work or rental income. Different income sources can have varying tax consequences, so it's essential to be aware of these distinctions.
3. Diversify Your Income Streams
   Diversification isn't just for investments; it can also help reduce tax liability. You can strategically withdraw money to minimize your overall tax burden by having a mix of taxable and tax-free income sources. For example, Roth IRAs provide tax-free withdrawals, while Traditional IRAs and 401(k)s are taxed upon distribution.
4. Utilize Tax-Efficient Withdrawal Strategies
   To save money on taxes during retirement, consider a tax-efficient withdrawal strategy. This strategy involves carefully planning when and how you withdraw funds from your various retirement accounts. Delaying Social Security benefits until full retirement age or even later, if possible, can often be beneficial, as this can increase your monthly benefit and reduce your reliance on taxable withdrawals.
5. Take Advantage of Tax Credits and Deductions
   Don't overlook the various tax credits and deductions available to retirees. For example, the Retirement Savings Contributions Credit (the Saver's Credit) can reduce your tax liability if you continue contributing to retirement accounts during retirement. Medical expenses, property taxes, and some home improvements may also be deductible.
6. Manage Your Required Minimum Distributions (RMDs)
   Once you reach age 72 (or 70½ if you turned 70½ before January 1, 2020), you are required to take annual distributions from your Traditional IRAs and 401(k)s, known as RMDs. Failing to take the correct amount can result in substantial penalties. However, you can strategically plan your withdrawals to minimize the tax impact, particularly if you have other sources of income.
7. Consider Tax-Efficient Investments
   Investing in tax-efficient vehicles can help you save more money in retirement. Municipal bonds, for example, often offer tax-free interest income at the federal level and sometimes at the state level. Tax-efficient mutual funds or exchange-traded funds (ETFs) can also minimize capital gains distributions.
8. Plan Your Estate Wisely
   Estate planning is crucial to ensure that your heirs inherit your assets with minimal tax consequences. Strategies like gifting, setting up trusts, or using the step-up on a cost basis can effectively reduce estate taxes and ensure a smooth transfer of wealth.
9. Consult with a Tax Professional
   Navigating the complexities of retirement tax planning can be challenging, so it's advisable to consult with a tax professional or financial advisor who specializes in retirement planning. They can help you create a personalized tax strategy tailored to your financial situation and goals.

Saving money on taxes during retirement is not just about pinching pennies but rather making informed financial decisions that can help you maximize your retirement income. By understanding your income sources, diversifying your income streams, employing tax-efficient strategies, and seeking professional guidance, you can minimize your tax burden and enjoy a more financially secure retirement.

Remember that tax laws can change, so staying informed and regularly reviewing your retirement plan is essential to adapt to new tax savings opportunities.

Audit Proof Your Tax Return

 

No one likes the stress involved when your tax return is under the audit spotlight. Here are some ideas to avoid some of the more common audit triggers.

1. Report everything that has an informational tax return. If you are like most Americans, you will receive numerous 1099s and W-2s in the mail. The IRS receives them too. If your tax return does not meet or exceed this reported income you can count on receiving a notice from the IRS. Some hints:
   • Make a list of the forms received last year
   • Update the list with any new vendors or employers
   • Check off each of them when you receive them
2. Match the reports…even when they are wrong. When reviewing your tax return make it easy for the IRS programs to match what is being reported to them. If an amount on a 1099 or W-2 is incorrect, try to get it changed before you file your tax return. If not possible, report the incorrect amount (so it matches the IRS records) and then correct it with an explanation.
3. Get your key information right. Social Security numbers must be valid. Names must match Social Security numbers. Mis-matches here are sure to be noticed.
4. Get your dependents right. You and an ex-spouse must consistently report your dependents. Both of you cannot claim a child as a dependent. If an ex-spouse claims paying you alimony, it must match alimony income on your tax return.
5. Get your documents in order. While the chance of being audited is historically low, it is expected to rise with all the recent hires at the IRS. Your best defense is to be prepared. So act now to organize your tax records. That way if you are audited, you will be ready to defend your deductions.