Avoiding an Audit
Ellen Stark, with Money Magazine, posted some insightful wisdom regarding audits. Here, she briefly explains the importance of your risk of getting audited. We have included the article and a small comment.
Ã¢â‚¬Å“The clock is ticking toward the tax filing deadline on April 15th. Ã‚Â We’ve got tax tips for you. Ã‚Â Today, how to avoid an audit:
If there’s one thing you may dread more than doing your taxes it’s hearing from the IRS later, but most people don’t have to worry about being audited.
In recent years the audit rate has been falling. Ã‚Â In 2013 barely 1% of all tax payers were audited by the IRS and manyÃ‚Â of those audits were by mail.
The more money you make, however, the worse your odds get. Ã‚Â
To keep down your risk of being audited, make sure you report all your income. Ã‚Â The IRS can match your 1099 and W2 forms to your return. Ã‚Â Larger than average deductions, rental losses, the home office deduction, and simple math mistakes can trigger an audit.
This slim chance of getting audited is why you should keep careful records. Ã‚Â The IRS usually has up to three years to take a hard look at your return, but if the agency suspects a serious problem it can look back six years.Ã¢â‚¬Â
We also agree. In summary, your risk of an audit is substantially low, but if you want to lower your chances even more, make sure to report all of your income and keep detailed and accurate records.
Seven Gables Real Estate