Keeping Detailed Information On Real Estate Deductions

There is a reason that so many people around the world despise tax season. It is that time of year where they have to wrestle with a tax code that is comprised of millions of words, dwarfing even the Bible in size and scope. CPAs have a hard time understanding it, so how can a normal human being? The government wrote it, and they can’t understand it. So what to do, what to do? The only thing you really can do is to keep detailed information on real estate deductions and other holdings. What can happen to you if you decide not to? Bad, bad things. And not all of them pertain to the dreaded IRS audit, though you will certainly find that one in the list below. In fact, there is really no better place to start.

1. The IRS Audit

Comedian Jerry Seinfeld, on his classic sitcom of the 1990s, once referred to an IRS audit as “the financial equivalent of a full scale rectal examination.” While Seinfeld’s joke was obviously just that, there is a lot of truth to what he states. When you are audited, your financial records are laid bare for all the world, or in this case the IRS, to see. If you do not have the detailed information that you need to make things work out, then you could end up paying in more – a lot more in many cases. While sometimes IRS audits may actually work to the advantage of the taxpayer, this does not happen very often. And either way, it’s a massive headache to deal with, so just avoid it at all costs.

2. Missing Tax Refund Monies

Not every mistake that you make will work to your disadvantage. If you are not keeping good tax records, then it is inevitable that you will end up missing out on incentives, loopholes, credits, or deductions, that actually end up with you getting a higher amount back from the government come April 15. Remember, it is never a bad thing to keep all of your paperwork and report everything, because there is a very good chance that you will stay out of trouble doing so.

3. Your CPA will love you for it

A certified public accountant is often the person, who must deal with your taxes. By giving him or her all the information they need, you could end up paying much less in the total cost of return. If you are a problem case, then you could incur more expenses, simply from being so disorganized.

Don’t take chances. If you have anything tax related for the year, make sure it ends up in one stack, pile, or box together. Tax season will be so much easier as a result.