It’s tax time. I’m sure all of you know. If you haven’t filed your taxes yet for the year, then you are probably in the process of doing so (or, at least I hope so!). One thing that you don’t want to happen is being audited by the IRS.
Usually your chances are very low, but there are certain things that can increase your chances of being audited.
You should always be honest with your tax return. Being honest is your best bet, because if you do get audited then you will have nothing to worry about!
If you make a mistake, then this may lead to the IRS investigating your tax return even further. You should take your time when doing your taxes, so that you can make fewer mistakes.
Organize your tax forms ahead of time so that you don’t find yourself scrambling to get your taxes done the week before the April 15th due date.
Making more than $200,000 a year.
Usually the more money you make, the more likely you will be audited. Of course though, you shouldn’t just be making less money so that you don’t get audited – that wouldn’t make any sense.
Taking a lot of deductions.
If you take every single deduction ever, then you may be audited because the IRS will wonder what is going on. You should only deduct expenses that you can deduct. Do your research!
Having a home office.
Sometimes having a home office will trigger an IRS audit. This is because many people say that they have a home office when they actually do not, or they will deduct more than they are supposed to.
If you have a home office, then you need to actually have one. Your home office cannot be your bedroom, your living room, etc. It needs to be space just for your home office.
Having a complicated tax return.
Usually, the simpler the better when it comes to tax returns. If you have business losses, multiple partnerships, a home office, large amounts in charitable deductions, etc., then you are more likely to be audited then someone with a simple tax return.
Have you ever been audited?