Avoid These 3 Shades of Tax Fraud and Save Money on Your Taxes in 2024
The new tax season is here, and as you know, I’m always here to help you with your taxes and answer any questions you may have. But I also want to educate you and warn you about some common tax issues you must avoid.
That’s why I created this YouTube video about the “three shades of tax fraud”. Yes, you heard me right. Tax fraud. It’s a serious crime that can land you in big trouble with the IRS and cost you a lot of money and headaches. And you may not even know that you’re committing it.
WATCH THE FULL VIDEO HERE:
In this video, I explain what tax fraud is, how to spot it, and how to prevent it. Even though I recorded it some time back, these tax frauds are still prevalent today, and the IRS knows it. You don’t want to miss this video. It’s packed with valuable information and tips to help you file your taxes correctly and confidently.
So, let me give you a quick overview of what I cover in the video. Here are the three shades of tax fraud that you need to watch out for:
Claiming other people’s children
This is when you claim someone else’s child as your dependent on your tax return, even though you’re not the parent or guardian, the child doesn’t live with you, or you don’t provide over 50% of the child’s support. This is a big no-no. You can’t claim a child just because you know them or you gave them some money. You have to meet certain criteria to legally claim a child. And if you don’t, you’re committing tax fraud.
You’re also cheating yourself out of the tax benefits that you may qualify for, like the Earned Income Tax Credit, the Child Tax Credit, or the Dependent Care Credit. Don’t do it. It’s not worth it.
Falsifying business income or deductions
This is when you create a fake business or inflate your deductions on your Schedule C form, which is used to report income and expenses from a sole proprietorship. This is another big no-no. You can’t make up a business that doesn’t exist or claim expenses that you didn’t incur.
You have to report your business income and expenses accurately and honestly. And you have to keep records and receipts to back them up. If you don’t, you’re committing tax fraud. You’re also risking an audit, penalties, and interest from the IRS. And you may end up owing more taxes than you saved. Don’t do it, y’all. It’s not worth it.
Padding deductions
This is when you overstate your deductions, such as charitable contributions, medical expenses, mileage, or mortgage interest. For example, your mileage is 3,000 miles, right? Come to find out; you bring paperwork to me to say your mile is 6,000. This is the third big no-no. You can’t claim deductions that you didn’t pay or that exceed the limits set by the IRS. You have to report your deductions accurately and honestly. And you have to keep records and receipts to back them up.
If you don’t, you’re committing tax fraud. You’re also risking an audit, penalties, and interest from the IRS. And you may end up owing more taxes than you saved. Don’t do it, y’all. It’s not worth it.
How Can You Avoid Tax Fraud?
Now, you may be wondering, how can I avoid these shades of tax fraud? How can I make sure that I’m filing my taxes correctly and legally? Well, the answer is simple. You need to choose your tax preparer wisely. You need to find someone who has integrity and expertise, not just credentials. You need to find someone who knows the tax laws and can help you save money and avoid mistakes.
How Can You Hire Me To File Your Taxes?
I’m here to help you with your taxes. I offer a basic tax return prep service that is affordable and convenient, and most importantly, I protect you from committing tax fraud. You can sign up on my website and upload your documents online. I’ll take care of the rest. I’ll make sure that you claim the right dependents, report the right income and expenses, and take advantage of the tax credits that you qualify for.
If you want to learn more tips about taxes, accounting, and bookkeeping, head over to my YouTube channel for tons of lively and educational videos.
Frequently Asked Questions
- What is tax fraud, and why should I avoid it?
Tax fraud is the intentional or negligent violation of tax laws to evade paying taxes or to claim refunds that you are not entitled to. You should avoid tax fraud because it is a serious crime that can result in penalties, interest, audits, and even criminal prosecution by the IRS. Tax fraud also harms the public interest and the integrity of the tax system.
- How can I claim a child as my dependent on my tax return?
To claim a child as your dependent, you must meet certain criteria. You must be the parent or guardian of the child, the child must live with you for at least six months of the year, and you must provide over 50% of the child’s support. You also have to make sure that the child is not claimed by anyone else. You can’t claim someone else’s child just because you know them or you gave them some money.
- How can I report my business income and expenses on my Schedule C form?
To report your business income and expenses on your Schedule C form, you must be honest and accurate. You must report all your income from your business, whether it is cash, check, credit card, or other forms of payment. You also have to report all your expenses that are ordinary and necessary for your business, such as supplies, rent, utilities, advertising, etc. You must keep records and receipts to prove your income and expenses. You can’t make up a business that doesn’t exist or claim expenses that you didn’t incur.
- How can I take advantage of the tax credits that I qualify for?
To take advantage of the tax credits that you qualify for, you have to understand the eligibility requirements and the amount of the credits. Some of the common tax credits that you may qualify for are the Earned Income Tax Credit, the Child Tax Credit, the Dependent Care Credit, the Education Credits, and the Saver’s Credit. You must fill out the appropriate forms and worksheets to claim these credits. You should also keep records and documents to support your claims.
- How can I choose a tax preparer that I can trust?
To choose a tax preparer that you can trust, you must do some research and ask some questions. You must look for someone who has integrity and expertise, not just credentials. Check their reputation, reviews, and references. Also, ask them about their fees, services, and guarantees. You must avoid tax preparers who promise high refunds, falsify information, or ask you to sign blank forms. Find someone who knows the tax laws and can help you save money and avoid mistakes.
