{"id":113,"date":"2024-07-07T17:22:42","date_gmt":"2024-07-07T17:22:42","guid":{"rendered":"https:\/\/www.andrewsamaniego.com\/blog\/?p=113"},"modified":"2024-09-12T19:14:24","modified_gmt":"2024-09-12T19:14:24","slug":"love-the-governments-numbers-heres-why-you-might-want-to-reconsider","status":"publish","type":"post","link":"https:\/\/www.andrewsamaniego.com\/blog\/love-the-governments-numbers-heres-why-you-might-want-to-reconsider\/","title":{"rendered":"Love the Government\u2019s Numbers? Here\u2019s Why You Might Want to Reconsider"},"content":{"rendered":"\n

Hello, everyone! Last night, we rediscovered one of California\u2019s iconic experiences\u2014the drive-in theater in San Diego. <\/p>\n\n\n\n

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With the beautiful night sky above us and nestled in the comfort of our car, it was the perfect way to enjoy a movie with our little one, Kainalu, without the fuss of a traditional cinema. <\/p>\n\n\n\n

Speaking of doing things differently, it got me thinking about a less enjoyable aspect of life where going with the ‘default’ might not be in your best interest\u2014dealing with the IRS, especially when it comes to their version of your tax returns.<\/p>\n\n\n\n

When the IRS Does Your Homework<\/h4>\n\n\n\n

Imagine this: You’ve skipped filing your taxes for a few years. Maybe life got busy, or perhaps the paperwork seemed overwhelming. Whatever the reason, if you don\u2019t file, the IRS can file a tax return on your behalf. <\/p>\n\n\n\n

This is known as a Substitute for Return (SFR). Sounds helpful, right? Well, not so fast. Let’s dive into why accepting the IRS\u2019s numbers might not be the best move.<\/p>\n\n\n\n

**1. One-Size-Fits-All Approach:<\/strong> Just like a drive-in movie isn’t the perfect fit for every moviegoer, an SFR isn’t tailored to your unique financial situation. The IRS fills out these returns based only on the information it has, which usually means without any deductions, credits, or exemptions you might be entitled to. This can lead to a significantly higher tax bill.<\/p>\n\n\n\n

**2. Missing Out on Deductions and Credits:<\/strong> When the IRS creates an SFR, they don\u2019t know about your charitable donations, your deductible mortgage interest, or that you have three kids who could qualify you for substantial tax credits. Every detail omitted can mean more dollars out of your pocket.<\/p>\n\n\n\n

**3. Tax Liabilities and Penalties:<\/strong> Not only does an SFR often result in higher tax due, but it also starts the clock on penalties and interest. These can accrue at an alarming rate, turning what might have been a manageable bill into a financial nightmare.<\/p>\n\n\n\n

**4. Less Control Over Your Financial Life:<\/strong> Relying on the government to report your earnings and calculate your taxes means giving up control of your financial narrative. It\u2019s like letting someone else pick the movie you\u2019re going to watch at the drive-in\u2014you might end up watching a horror flick when you really wanted a comedy.<\/p>\n\n\n\n

Taking Back the Reins<\/h4>\n\n\n\n

So, what can you do if you find yourself facing an SFR? First, don\u2019t panic. Second, it\u2019s time to take action:<\/p>\n\n\n\n