3 Ways to Illegally Lower Your Taxes
There is no doubt about it. Lowering taxes is everyone’s ultimate goal. There are many ways to achieve this and pay less taxes – some are above board and even recommended by the IRS. Others, if attempted, can draw unnecessary attention to your return, initiate an audit and land you in jail and paying a hefty fine to the IRS. We’ve included 3 strategies to stay away from if you want to stay out of jail and 3 strategies that will actually work to keep your taxes low! Can you guess which strategies are legal and which are not??? We will come clean at the end of the article…just as you should with the IRS at the end of the year!
Legal and Illegal Ways to Lower Your Taxes
1. Failing to report income on your taxes that you received from a small job early in the year that only lasted 3 months and paid you $1000.
2. Contributing the maximum amount of funds to your IRA each year to tax advantage of pre-tax contributions.
3. Buying business related materials and supplies at the end of the year.
4. Depositing a portion of your income in an off-shore bank account to keep it safe during divorce proceedings and failing to claim it as income one year.
5. Buying a computer on December 31st for your daughter to take to college and claiming it is a business related expense.
6. Taking a tax credit for remodeling your home with energy-efficient improvements.
Most people will quickly know that #1, #4 and #5 are illegal ways to lower your tax return. Failing to report income is one of the worst things that you can do when filing a tax return. The IRS has many ways of finding out your full income and receives all 1099s that you receive – if you are flagged for an audit, you will have to spend time and resources pursuing this. Failure to report income (or hiding income in an off-shore account) can result in a conviction of tax evasion or tax avoidance. Both can result in fines and jail time. In addition, making purchases at the end of the year and not being truthful about the real way they are used, is also illegal (#5). There are many ways to LEGALLY reduce your tax return. Taking advantage of tax credits that apply to you (#6), purchasing and deducting business related items at the end of the year (#3) and making contributions to your retirement (IRA) are great ways to reduce your tax return without drawing unnecessary attention from the IRS. These strategies are even endorsed by the IRS so you can rest easy knowing that you are taking measures to help yourself legally.
Contact Success Tax Relief for Help Today
If you are unsure whether your tax planning for the coming year fall into the legal or illegal category and want to stay away from an IRS audit resulting in jail time and fines, consider partnering with a tax firm that knows the difference. Success Tax Relief has spent more than 30 years in the business of keeping our clients from tangling with the IRS. We can guide you toward legal means for reducing your tax bill and increasing your refund. Give us a call today at 1-877-825-1179.