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A few tips for income tax preparation

As April 15^th approaches, taxpayers must decide whether they need help preparing their returns and, if so, who is best able to provide the help they need.

Many changes in the tax laws are passed each year. Taxpayers who are in doubt about both new and existing laws may decide to utilize a tax return preparation service. If confronted with complex tax issues, the services of a tax attorney or accountant may be needed.

For the income tax "do-it-yourselfer," obtaining the right forms and carefully reading instructions is the best place to start.  Here are additional tips: review your checkbook and paid receipts for all possible deductions.  Don't forget to include the amount you paid on last year's Illinois income tax and other deductible taxes.

If you paid maintenance (alimony), it is deductible, and if you received such payments, it must be reported as income.  Child support payments, however, are not deductible for the person making them, nor are they reportable as income for the spouse receiving them on behalf of minor children.

When April 15^th passes, most of us sigh with relief that our tax concerns are over for another year.  However, some people may find themselves looking at tax issues later in the year if they become the subject of an Internal Revenue Service audit.

If you are notified that you are the subject of an audit, here are ways you can prepare for dealing with the IRS:

• Determine whether it is a civil or criminal inquiry;
• Clarify whether it's you or your business that is being audited;
• Know which year or years are in question and the particular deduction or income of concern to the Internal Revenue Service;
• Gather all relevant W-2 forms, receipts and other personal documents.

In all dealings with the IRS, remember to be as factual and complete in your answers as possible. An experienced tax attorney can help you prepare for your audit.

It is important for you to recognize that you have certain responsibilities as a taxpayer. Make sure you enter all information in a true and accurate way. Remember that you are ultimately responsible for information contained in your tax return, even if someone else prepares your return. If your return is successfully challenged by the IRS, you will have to pay the additional taxes due, plus interest and possibly penalties, regardless of how your return is prepared and filed. And, if you knowingly provide false information, you could also be subject to criminal penalties, including jail.

 

Note: This information was prepared as a public service by the Illinois State Bar Association and is a joint project with the Illinois Press Association. Its purpose is to inform citizens of their legal rights and obligations.

© Illinois State Bar Association

If you have questions about the application of the law in a particular case, consult your lawyer. The law is constantly changing. Information on this site or any site to which we link does not constitute legal advice.