5 Mistakes that Could Cause IRS Trouble for Grayslake Taxpayers

While neglecting to include all income sources on a tax return may seem insignificant to some taxpayers, doing so can easily result in trouble with the Internal Revenue Service (IRS). Go Banking Rates identifies the top five taxable income streams that Americans neglect to report.

Certain gifts that reach a valuation limit must be added to tax documents. Unreported monetary gifts risk an Accuracy-Related Penalty, according to the IRS, which is equal to a fine of 20 percent of the underpayment due.

Find a tax professional in Grayslake

“Gifts that you give to someone else may be taxable,” said Clay Wyatt with Go Banking Rates. “The good news is that you can give up to $13,000 worth of gifts per person, so for instance, you can buy each of your four grandchildren a $13,000 car without giving a ‘gift’ to Uncle Sam.”

Other income sources commonly left out of tax returns: 

• Contract Work
• Gambling Winnings
• Gifts
• Inheritances
• Mutual Fund Gains

Read more about these common tax errors on Go Banking Rates.

Information provided by Go Banking Rates

Related:

When Can I File My 2012 Tax Return in Grayslake?