Should you really be worried about being audited by the IRS? Overall, only about 1% of tax returns are audited each year.
But here are the red flags that could put you at the head of the line for an audit.
Reason #1 If the IRS thinks you are claiming too many deductions or you’re failing to report all your income you could be flagged.
Reason #2 There are math errors on your tax return.
Reason #3 You failed to report income on tax forms like 1099s and W2s. The IRS gets copies of those forms that are sent to you.
Reason #4 Too many deductions than other taxpayers like you.
Reason #5 If you deduct too many miles on your vehicle for business use.
Reason #6 You have a cryptocurrency account and you fail to report your transactions.
Reason #7 If you have a cash business you could be flagged for an audit.
Reason #8 If you claim the Earned Income Tax Credit you could be audited because the IRS wants to be assured you’re entitled to the tax savings.
Reason #9 Self-employed taxpayers could be flagged for an audit because they may have lots of deductions.
Reason #10 If you deduct a home office you could be flagged.
Those are the top reasons for an audit. But don’t be afraid to claim deductions and tax breaks that you are entitled to.
Still not sure what to deduct for your current income tax? Call us today for immediate help. Our tax attorney and tax professionals can get you the best deduction.
Disclaimer: Alan Mendelson is a well-known TV consumer news reporter who reports on tax issues. You should seek professional advice if you have tax questions or issues.
