(NBC) – You could be cheating on your taxes and not know it. That’s because tax laws have changed dramatically in the past couple years.
MTV Jersey Shore star Mike “The Situation” Sorrentino was an intentional tax cheat. He turned his infamous abs into an empire, but he failed to report millions in income to the IRS. In a story told on CNBC’s next American Greed, Sorrentino spent eight months in prison for tax evasion.
Your situation is probably not as dramatic as his. But you too could run afoul of the law, if you’re not careful.
“Recent changes in the tax laws mean some of the deductions and credits you’ve been accustomed to in the past are gone. As this year’s tax deadline approaches, don’t be caught off guard,” said American Greed’s Scott Cohn.
Gone are deductions for some employee expenses like a home office. And there are caps on deductions for mortgage interest and state and local taxes.
Did you change your withholding last year because of an unexpectedly small refund? The IRS says double check, too little withholding could mean a penalty.
Tax attorney Brad Paladini says consider hiring a professional to keep your deductions legit.
“You’ve got to find somebody who’s willing to tell you, ‘no’,” he said.
Got a side hustle or a gig economy job? Report all your income, even if you get paid in cash. The IRS is watching, and you don’t want to get into a Mike Sorrentino-style situation.
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