Tax time...

[Ledd]

Hey guys I was hoping to find someone on here with IRS knowledge.  My question is does the IRS already know how much money I made?  I plan on claiming my full time job as I do every year, but this year I received unemployment benefits for part of the year and I also drew some of my Traditional IRA money early.  All said it wouldnt raise my gross income more than five grand for the year, however that is enough to put me in a higher tax bracket.  I'm wondering if I can get away with just claiming my f/t job, or if they already know or will know and then wind up owing THEM money.  I'd really appreciate some advice here.

[240 is Back]

pay your taxes.

always pay them on anything that went on paper.

you'll sleep better, you won't have BS following you your whole life.

Go to HR block or an acct, get a lot of breaks and deductions, and take advantage of every cent you spent this year.

[ToxicAvenger]

http://turbotax.intuit.com/tax_products/online_products.jhtml

[BayGBM]

There is no single person at the IRS that “knows” what you’re doing when you cheat on your taxes.

You should know, however, that the figures in your return will be checked by a computer against:
A) your previous returns
B) figures reported to the IRS by your employer, bank, broker, etc. 
C) millions of other returns of people  who share your profile (age, marital status, income bracket, occupation, etc.) and if your figures are inconsistent (enough) with the range the computer expects for someone of your profile, you may be flagged for an audit and that’s when you can get screwed, because it is then you will have to produce documents (receipts) and justify your deductions and other transactions that must include a paper trail. 

If you are unable to explain or document any and everything the auditor asks for, you can get hit with payments and penalties.  The payments (back taxes) are not usually the problem, but the penalties are usually painful because they can run high very quickly if you are not able to make full payment in the limited time that they give you.

A simple math error on your return is usually identified (and you’re notified) within a year of your filing.  Most audits, if they are going to occur at all happen within 3-5 years, but that is not an absolute cut off date.

If you’re going to fudge some numbers, be reasonable--don’t get greedy.

[240 is Back]

that Richard hatch from the original Survivor - he got something like 13 years for not reporting that million, I think.

[BayGBM]

that Richard hatch from the original Survivor - he got something like 13 years for not reporting that million, I think.

Yes, he was stupid.  CBS reported to the IRS that they gave Hatch the million (wasn’t it nearly half that after taxes?).  Anyway, Hatch did not report his windfall, so when the computer checked his return against the figures reported by CBS it found a big discrepancy that triggered in inquiry… and we all know how that ended. 

[Thin Lizzy]

Hey guys I was hoping to find someone on here with IRS knowledge.  My question is does the IRS already know how much money I made?  I plan on claiming my full time job as I do every year, but this year I received unemployment benefits for part of the year and I also drew some of my Traditional IRA money early.  All said it wouldnt raise my gross income more than five grand for the year, however that is enough to put me in a higher tax bracket.  I'm wondering if I can get away with just claiming my f/t job, or if they already know or will know and then wind up owing THEM money.  I'd really appreciate some advice here.

I'm no accountant, but I did take the HR Block tax preparer course, and did tax prep for a few years.

You might not owe as much as you think, since you were unemployed for part of the year.

Even though unemployment bennys are taxable, the amount of tax you owe on them, or at least part of it, will be offset by the tax you paid at your full-time job.

Let's say you worked your ft job for six months and made 25k. Employers will  tax you as though you made 50k for the year ($1000 gross per week), even if you didn't work the whole year.  So you were taxed at a higher rate than your actual yearly income.

With regard to your IRA. The amount you withdrew is taxable + 10% penalty for early withdrawl. (If you withdrew 10K, you have to pay tax on 11K). Will you get away with not reporting it? Probably. Is it worth it? Probably not.