1. Have you taken advantage of all potential tax breaks? What steps can you take in the future to further reduce your tax burden? For example, to what extent can you take advantage of home office deductions?

Remember: for the 2000 tax year, the rules have become a bit more liberal for home office deductions. To claim a home office deduction, your home must be your principal place of business. In the past, it wasn’t enough to carry out administrative or management activities in your home. But under the new law, you now qualify if you conduct substantial administrative or management activities there, provided you have no other office.

We’ll be talking more about your home office in later articles. But for now, if you’re working on your 2000 return and think you might qualify for home office deductions, check out IRS publication 587, “Business Use of Your Home.”

2. Are there any red flags on your return? The odds of being audited are awfully small. Try to keep them that way. Don’t call attention to your return unless you have to. In some cases that’s unavoidable — or, in fact, advisable.

But most of the time you just want your return to be as inconspicuous as the next guy’s. To ensure such anonymity, make certain the math is right. Include all the required attachments, especially the W-2s. And make sure that all the numbers match the information on the forms sent to the IRS by third parties. These forms include any W-2s, 1099s and 1098s.

3. Have you (and your spouse, if you’re filing jointly) signed the return? That’s an easy thing to forget, but a sure-fire way to get unwanted correspondence from the you-know-who.

4. Have you substantiated everything on the return? You’ll sleep better at night if all your tax ducks are in a row. Just picture the scene: The IRS calls you in, asking you to prove that you’re entitled to all the deductions you’ve taken. And you come in with well organized, detailed, legible documents giving you unquestionable right to those deductions.

It almost makes you want to be audited. (Not quite, but almost.)

If you can substantiate a deduction, by all means, take it. A lot of taxpayers fail to take deductions they have a right to, either because they don’t want to wake up the IRS, or they have an overly cautious tax preparer. If it’s yours, take it.

If you own a business, file a Schedule C even though you’ve heard, correctly, that the IRS pays extra attention to these forms. If you’ve substantiated everything, you have nothing to worry about.

5. Have you included payment? Do everything you can to keep up to date with your payments. Interest and penalties can escalate quickly. And once the IRS gets its teeth into you, it may never let go.

If you can’t pay, the IRS will usually work with you. File your form. Then file form 9465, which requests permission to pay in installments.

This should be the last resort, though. After all, the IRS should be the creditor you pay first.

In any event, budget your finances so you don’t fall behind again. The toughest part is wiping the slate clean. Once it’s clean, don’t mess it up again.

6. Are all the addresses — yours on the return, and the address you’re sending it to — correct?

Double check that you’re sending the return to the right address. And make sure your own address is listed correctly. If the IRS ever needs to get hold of you, and sends its notices to the wrong place, you’re the one who’ll pay for it — in the form of increased penalties and interest.

7. Have you made your full IRA contributions by April 16? (Remember, April 15 falls on a Sunday this year, so you get an extra day.) You can deduct an IRA contribution to a Traditional IRA (as opposed to a Roth IRA) if you make the contribution by that date, even if the contribution is for the 2000 tax year. You can deduct up to US$2,000. (For a Roth IRA, you don’t get the deduction, but you don’t get taxed when you finally make withdrawals). If you were an active participant in a plan during the tax year, your deduction might be limited, depending on your income. Your plan administrator should be able to clear up any questions you might have.

8. If your spouse does most of the work on your taxes, do you know enough of the details to satisfy yourself? We know you trust your spouse, but... for a variety of reasons, you need to know what’s on that return. If your spouse makes a mistake, and can’t (or won’t) pay, the IRS can come after you — even if, sad to say, you’re no longer married!

It’s true that the rules have been made more lenient for “innocent spouses” who know nothing about the taxes. But don’t count on that.

When you are done with this year’s return, sit back, relax, have a cold one, and start thinking about the 2001 return you’ll be filing next year.

And if the amount of taxes you’re paying every April has you seeing red, then by all means, let your representatives know about it. The current occupant of the White House is more likely to favor tax relief than his predecessor (or even his father — remember “no new taxes”?), so now’s the time to put the pressure on. Maybe next year things will be easier for all of us...