The IRS gets information from third parties and matches this information to you through its computers.Stay one step ahead by being extra careful to report on your tax return what the IRS ALREADY KNOWS ABOUT YOU. You should all third parties copies of all information that they send to Uncle Sam.
What Uncle Sam knows:
1. Your Income- If you get more than $600.00 you will get 1099-misc from
-Freelance
-Rent/royalties
-Prizes and awards
-Payments made by medical and health care insurers
2. Your Wages- W-2 to the dime.
3.Interest income- amount over $10.00 in money, stock, capital gains or property from corporation. 1099-div/int.
4.Tax refund income- state and local governments must report such payments $10.00 on form 1099-G. Important exception: if you did not claim the state and local taxes that you paid as itemized deductions on your federal return, you don’t have to report refund as income.
5. Gambling winnings- horse racing, lotteries, raffles, bingo, slot machines are reported on W-2G if more than $600.00
6.Unemployment
7.Social security
8.cash deposit of more than $10,000 made to your bank account.
9. Distributions from IRA or Pensions.