In medicine, the adage “prevention is always better than cure” is nearly universal. Rather than curing every illness that the human body acquires, medical professionals should educate the citizens on how to live healthily so that any sickness will not grip their organ systems in the first place. Coincidentally, this dogma does not only apply to diabetes or hypertension. It also touches the topic of paying properly one’s taxes.
No one wants a run- in with the IRS. Surely, everyone would avoid it completely as much as possible. Banking on that thought, certain measures can be taken—and they are quite simple, thankfully. For instance, it doesn’t take a lot to pay attention to one’s Form 1099. If the taxpayer gets one of these forms in the mail, then they better open and read it.
Another thing to consider is that everything has tax consequences. Leases, purchase agreements, settlement agreements, employment agreements, independent contractor agreements, and other types of arrangements have taxes written all over them. They don’t need to be large transactions to be noteworthy. It’s best always to consider taxes before signing anything.
Finally, one of the most important steps to take but the least emphasized and the least done of all is the keeping of records. Horrible record keeping is the number one cause of problems with the IRS. It takes a little bit of time to get used to since few people like to keep records and documents, but the benefits severely outweigh the inconveniences the practice causes.
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