Few if any people genuinely enjoy doing their taxes, and this is likely due in part to just how complicated the process can be. Unless you make your living as an accountant, you may find yourself confused by the language, whether you fit the criteria for certain tax breaks and so on.
Because there is so much involved in filing your taxes, many people like you end up guessing in certain areas, but doing so can land you in serious trouble with the Internal Revenue Service. Even if your actions are entirely unintentional, you may still face serious consequences, so it is important to identify some of the ways in which taxpayers often make missteps when filing their taxes. For example, you may unknowingly commit tax fraud if you:
Take advantage of deductions you should not
Many Americans run into trouble when filing their taxes because they try and take advantage of the wrong deductions. For example, there are specific rules that you must follow when deducting business expenses – meaning you cannot take your whole family out for a steak dinner and then write it off as a business expense. Similarly, if you work from home, you cannot take advantage of the home office deduction unless you use the room you conduct business in exclusively for work purposes.
Mistakenly take advantage of the Earned Income Tax Credit
To legally take advantage of the Earned Income Tax Credit, which seeks to minimize the tax burden for low-wage earners, you have to adhere to certain income requirements (please note that the maximum amount you can earn tends to fluctuate with each new year). If your income is more than the set amount and you try and claim the credit anyway, you can expect that this will pique the interest of the IRS and possibly lead to a tax audit.
Unfortunately, the IRS does not care whether your tax errors are intentional or simply the result of misinformation. Tax-related messes can prove difficult to clear up, so it is always wise to take your time and do your research before filing.