The deadline for filing tax returns this year has been extended from April 15, 2011 to April 18, 2011. According to IRS sources, audits of individual tax returns are up 100% since 2001. Here is a short list of some best practices to keep in mind as you file your return for this year:
1. Report All Income-Do not exclude a single penny
2. Verify Donations with back-up documentation
3. Accurately deduct auto mileage and be sure to include documentation.
4. Carefully report capital transactions
5. Avoid minor mistakes like transposing numbers on a social security number, math errors and having an incorrect filing status.
Lastly, it appears that when an individual takes advantage of filing electronically, there are 2 benefits. First, there is a lower error rate and second, audits on electronically filed returns are lower.
– Jennifer Luzzatto, CFA, CFP, NAPFA Registered Financial Advisor, 2-Feb-2011
– Sharon Kinter, Para-Financial Planner and Budget Coach, 2-Feb-2011
