Did you know that you have a bill of rights? Probably, but not a “bill of rights” for taxes.
Well, there is a “bill of rights” for taxes and as a tax payer, you should be aware of them.
There is an article on the wires today that talks about red flags and why not to do something. If you have read the taxpayers bill of rights “you have the right to pay the correct amount of taxes”. Having the right and knowing how to exercise that right are two different things.
Red flags exist because historically the deduction is not taken properly which is with documentation ergo be prepared. The first of the CNN red flags was charitable contributions, for most of us this is not an issue, but for the 300K or higher earners and business owners this is the number one best deduction you can have to lower you AGI. Through conservation easements and historical building easements you can lower your AGI by 50% when approved by congress this year. It is a savvy tool, you will need help but that brings us back to the other tax payer right, the right to representation.
Home office- Red flag, don’t take no for an answer, we teach you how to document this for a proper deduction, the IRS was having such a hard time they put in an option to take the home office for $5 a sq. ft. this year to make it easy. If you take the later you probably will leave money on the table.
Bizarre deductions – is also noted, again there may be a good reason for such things. There are many things under health care that are allowed and may be bizarre, like a swimming pool. For some, this is a quality of life thing as it is a form of rehabilitation with a prescription from a doctor. Tax Saving Professionals is not in the business to justify all deductions, but all of us have a way to get a Private letter ruling which is an approval before taking a deduction from the IRS if you think it is bizarre. What we do is consult and provide the best possible interpretation of the tax code to your benefit as it is 73,954 pages long.
If all of this is new or news to you, then you might be overpaying your taxes. We service high net worth clients in excess of $300K per year and business owners with revenues of $1M and above.
CNN Money : IRS Red Flags