For example, say your bank deposits a total of $100,000. The AGI on your tax return may be only $55,000, broken down as follows: a capital gain of $2,000, rental loss of $15,000 as well as wages of $68,000. But if you dig into the tax return, there may be adjustments: net pay was only $60,000, rental income before deductible expenses was $18,000 and gross proceeds from the stock sale before subtracting basis was $22,000 for a total of $100,000. The IRS will be satisfied that your tax return matches your financial activity for the year.
If you cannot match income in this manner and cannot explain any bank deposit overages that dont coincide with income listed on your tax return, the IRS may classify the overage as taxable income and calculate additional tax on it. The auditor may believe you are hiding income. Remember: Guilty until proven innocent is the mantra within the offices of the Internal Revenue Service.
Take this as a lesson in audit-proofing your income tax return. You may want to mark your deposit receipts or your bank statements each month with the source of income for all bank deposits. That way, if you are audited, you have answers at hand. After all, a $5,000 gift from grandma or a $350 refund on a dress you returned is not taxable income and will account as such if the IRS ever asks.
For example, say your bank deposits a total of $100,000. The AGI on your tax return may be only $55,000, broken down as follows: a capital gain of $2,000, rental loss of $15,000 as well as wages of $68,000. But if you dig into the tax return, there may be adjustments: net pay was only $60,000, rental income before deductible expenses was $18,000 and gross proceeds from the stock sale before subtracting basis was $22,000 for a total of $100,000. The IRS will be satisfied that your tax return matches your financial activity for the year.
If you cannot match income in this manner and cannot explain any bank deposit overages that dont coincide with income listed on your tax return, the IRS may classify the overage as taxable income and calculate additional tax on it. The auditor may believe you are hiding income. Remember: Guilty until proven innocent is the mantra within the offices of the Internal Revenue Service.
Take this as a lesson in audit-proofing your income tax return. You may want to mark your deposit receipts or your bank statements each month with the source of income for all bank deposits. That way, if you are audited, you have answers at hand. After all, a $5,000 gift from grandma or a $350 refund on a dress you returned is not taxable income and will account as such if the IRS ever asks.
i'm not missing any point, he can't do wu and mg so he is screwed anyways, who do you think is more likely to be audited, a personal account or a check cashing place, so who is naive now. i know what i am doing, he is obviously already on someone's radar because he blacklisted by mg and wu. i know what i do and what i would do, it wasn't about me. i know how all the junk works that you are talking about, if you think there isn't a way to figure out no matter what way you do it, then you are naive. it is all attached to your name, period. you are missing the point entirely, he can't use mg or wu so really he is screwed already.
i'm not missing any point, he can't do wu and mg so he is screwed anyways, who do you think is more likely to be audited, a personal account or a check cashing place, so who is naive now. i know what i am doing, he is obviously already on someone's radar because he blacklisted by mg and wu. i know what i do and what i would do, it wasn't about me. i know how all the junk works that you are talking about, if you think there isn't a way to figure out no matter what way you do it, then you are naive. it is all attached to your name, period. you are missing the point entirely, he can't use mg or wu so really he is screwed already.
Established in 1995,
Hot Forum Topics
