The IRS audits only a small percentage of business and personal tax returns annually, because they lack the manpower to do extensive audits. However, there are “Red Flags” the tax return scanning system picks up that could target your corporate or personal return.

If your return is selected for review, you have nothing to worry about if you haven’t mis-stated the numbers on your return, and you have receipts to back you up.

Even though the odds of you getting audited may seem low, those odds increase dramatically based on your income and the types and amounts of deductions you claim. The higher your income the more likely your return will be selected, math errors make you more suspect, and taking larger than normal amounts of deductions in certain categories can trigger an audit. (more…)

Before you send your tax information off to your tax preparer, you might want to give it one last look to make sure you have not missed any tax deductions that could cut your tax bill for 2011.

That’s right, it’s the 2011 tax season, and you should already be looking for those federal income tax deductions that can legally lower your tax bill.

Here are a number of the typical deductions that you want to make sure your tax preparer knows about so you get the full federal income tax deduction allowed.

Traditional IRA contributions

You have until April 17, 2012, to contribute up to $5,000 to a traditional IRA for 2011 and deduct it on your tax return. You need to know the guidelines, so here they are in brief:

If you weren’t covered by an employer’s retirement plan in 2011, you can generally deduct your contribution in full.

If you were covered by an employer plan, you can only take a deduction if your adjusted gross income was below $66,000 ($109,000 for married couples).

If your spouse was covered but you weren’t, you can take a deduction if your combined adjusted gross income was below $179,000.

If you were age 50 or older on the last day of 2011, you can contribute up to $6,000. (more…)

TRANSCRIPT

Here are some typical examples of common cash flow problems business owners would like to get solved. They want to know
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Paul Smith – Pearl Harbor Survivor at Pearl on December 7, 1991 with his Daughter Sandra Simmons – Member of SDPHS – Sons and Daughters of Pearl Harbor Survivors

On this day, December 7 exactly 70 years ago Pearl Harbor was attacked. My Father, Paul Smith, was a Marine stationed at Pearl Harbor and served there on that fateful day. He spent his entire career serving in the military. He is now 90 years old and still a fierce patriot.

In 1991, on the 50th anniversary of the bombing, I was at Pearl Harbor with my Father for the memorial services. The 8 remaining marines from his battalion, including his commanding officer, were with us. As we took a boat across the water very early to arrive at the Arizona Memorial, I was struck by the stories the survivors told me, and I had them write in my copy of the book ”Day Of Infamy” so I could remember their stories.

Upon returning to Dallas, I wrote a story
about my Father and that trip and presented
it to him for Father’s Day the following year.


Here is the story. I hope you will read it, and I know he would be honored if you would leave a comment for him.

MY FATHER, MY HERO

Just behind me, crouching in the dark, I feel the awesome presence of the ancient volcanoes; their craggy faces bearded with mist, their feet firmly rooted in the dark chasms of the deep. Watching here together from the shore, we face the vast silence of the Pacific Ocean and wait for the dawn.

Standing beside me in the dark my father, Paul W. Smith, speaks to me of this day, over 50 years ago, when he stood here as a young Marine Corporal of 19 years and saw the rising sun appear. It had appeared not as a gentle light to warm the faces of the ancients behind us, but on the wings of enemy planes bringing the horrors of death and destruction that December day in 1941. (more…)