#1: Make sure you’ve reported all Form W-2s and Form 1099s
The IRS has a computerized program that matches up anything reported by employers or payors. If you received them, the IRS knows about it. Don’t miss them. You’ll hear from the IRS if you do.
#2: Did you report your charitable contributions correctly?
The rules seem to keep getting tougher every year when it comes to reporting and getting a deduction for charitable contributions. Make sure you are following the rules!
#3: Use the Right Filing Status
There are five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Widow(er) With Dependent Child.
#4: Use the right Social Security numbers
Make sure you don’t make a silly mistake by mixing up social security numbers for you, your spouse or your dependents.
#5: Keep proof you mailed or e-filed
Hang on to the proof that you sent your tax returns or extensions in on time. If you e-file, you’ll get a confirmation number. Hang on to it! If you mail, then make sure you send it return receipt requested and keep proof of the green card when it comes back.
#6: Are you really sure you’re ready to file?
If you are waiting on a report from a partnership or S Corporation, then by all means, don’t file. These type of entities have until September 15, 2010 to file. When they do file, and you are sent a Form K-1 with income or expenses to report on your tax return, the IRS’s matching program will want to see that you’ve reported it.
Too often new investors just think that it won’t matter or that the Form K-1 will show a slight loss and they’ll pass that up just to get an early return done. Do this and you’re almost guaranteed an audit. Even if you walk away from a deduction (and thus end up paying too much in taxes) the IRS computer is going to be upset with you that you didn’t pick up the right information.
If you’re still waiting for information, file an extension. Being patient here can mean dodging an audit down the road.