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Tips to avoid being audited by the IRS
SOUTHFIELD, Mich. – The deadline for filing federal income tax returns is just one month away. While individuals have no reason to pay more taxes than legally required, they also want to avoid making critical mistakes that could result in being audited by the IRS.
“Audits are rare, but they do occur every year,” said Venar Ayar, of Ayar Law Group. “There are ways people can increase their chances of being audited, which always want to be avoided. We consult our clients about how to properly file tax returns because people can make simple mistakes that could end up costing them a lot of headaches if the IRS does decide to issue an audit.”
There are many ways individuals can invite an audit that could have been avoided.
To name a few, making careless mistakes, omitting some reported income, making math errors, failing to file on time, failing to file at all, or rounding numbers in deductions are all red flags in they eyes of the IRS. These errors make the IRS believe that an individual is filing incorrectly with false claims, increasing the risk of an audit.
Another avoidable and common error people make is hiring an uneducated tax preparer. The IRS is constantly shutting down dishonest tax preparers, making their clients easy targets for an audit. It is extremely important for individuals to do their homework and make an educated decision when choosing a tax preparer.
For self-employed taxpayers, taking a big home-based business loss every year or writing off considerable unreimbursed employee business expenses can invite audits. Claiming a loss on a hobby, which is not pursued for profit, is also not tolerated by the IRS.
Taxpayers also have to be accurate when claiming their charitable contributions, as claims of substantial donations can be tempting.
These are just a few of the many ways individuals can invite an unwanted audit by the IRS. It is important to remember to be honest when filing a tax return, make realistic deductions and double-check calculations.
Choosing the correct tax preparer to file your tax return can help avoid these mistakes. Your taxes must be filed before April 15, doing your homework before arbitrarily picking any tax preparer is significant and will assist in avoiding an audit.
