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How to Hide From the IRS
Now, I do not mean that literally - but it is wise to avoid creating any red flags which will catch the eye of the IRS agent and trigger an audit. The IRS rulings are gray in many areas related to the operation of a home daycare business; therefore, it is easy to interpret their rules in a variety of ways. Rules pertaining to business use of home expenses, claimed by home daycare providers, are especially vague. Since no one wants to have a negative encounter with the IRS,what can we do? 1.Be sure to file your taxes by the due date. If you forget or run out of time and neglect to send anything to the IRS, there will be expensive penalties involved. If you foresee a delay, send in Form 4868 which is a request for a four month extension on filing your taxes. Be sure to include a check with this form to cover the taxes you think you will owe. If you have your taxes completed on time, but just do not have enough money to pay your liability, you do need to send in all that you can with your tax return by the due date. The IRS will send you a bill for the balance due and impose a penalty, but the penalty will be lower than if you just decided not to mail in the tax forms at all. 2.Report all wages and interest received during the year. Be sure that you supply the parents of children in your care with a Form W-10 listing your name, social security number (or tax identification number) as well as the total amount you have received from them for child care during the year of 1998. It is important that you have them sign this form agreeing to your figures and make copies of the form for your records as well as the parents. You need to be sure that the amount of income you claim matches the amount of the child care tax deduction the parent claims. If you or your spouse receive Form W-2s or Form 1099s, rest assured that the IRS received one too. If you do not claim the income, their "extra" copy could trigger an audit. 3.Remember to list correct social security numbers for all taxpayers and dependents. Incorrect or missing numbers usually stop the processing of your tax return and require human intervention. Big red flag! 4.On a final note, please keep in mind that no matter who prepares your tax return, you are ultimately responsible for the information your forms contain. Tax preparers process hundreds of tax returns each year. They are human and mistakes or omissions can occur. Be sure to take the time to verify all of the information on your return and ask for an explanation if certain parts are not clear to you. It is your right to know exactly what you are signing! Dear Reader: You can help us make this section even better! All of our articles and ideas have come from our imagination and from reader submissions. Please use this form to contact us if you have content you would like to add to this website. Make sure to add your comments at the bottom of the article! And don't forget to visit us on our child care forums for friendship, support and learning! Webmasters and Authors: We will gladly include a link back to your site or book in exchange for sharing your content. Just contact us!
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How to Hide From the IRSFriday, 23 January 2009 How to Hide From the IRS Now, I do not mean that literally - but it is wise to avoid creating any red flags which will catch the eye...
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