Tips on How to Avoid Tax Return Audits
Looking for some magical spell to cast on your tax returns to ward off audits? Im sorry to tell you, but there is no spell in this word that keeps the tax man away from you and that he will come when he needs to conduct a review, but don’t worry, there are some preemptive measures one can take to keep them away. The IRS has an eagle eye out for everybody, even if you are the most responsible and contentious tax payer in the world, there is still a chance that they will cast their eyes on you. Nothing will get your blood moving like getting a notice for tax return audit. So it’s one of your responsibilities to stay low below the radar.
There is only a 0.52% chance that you will be audited, as small as that number may be, it’s still wise that you don’t take any risks. The tax men might come after you and knock at your door. Here are some steps to make sure you stay low under the radar.
Be neat. If you work for the IRS, would you rather review a tax return in plain handwriting that looks like it was written by a kid on a newspaper, or a neatly printed one from a computer? Of course, we’d choose the one that’s neat and printed and so does the classifiers that work in the IRS. You won’t be breaking out the old typewriter however, there are other great software and tools that can help you out. Neatness is a great quality, the reviewer will feel that you respect their time and they will surely appreciate the effort.
Be accurate. A messy tax return is bad, a tax return with a lot of mistakes, errors, and corrections is far more worse. Take a good amount of time whenever you are performing any proofing on your tax returns, make sure that all the numbers line up and should easily add and subtract without any issues.
Always attach schedule C. If you own a small business, don’t forget to attach a complete Schedule C whenever you are filing your taxes. This document contains all the profit and the losses of a business, an important document that classifiers need whenever they are reviewing the returns from the companies that have a source of income from W-2 wages.
Dont forget to document the deductions. There should be proof to back up any unusually large deductions present on the tax return. This form of documentation can be receipt copies, photographs, insurance reports and canceled checks.
Punctuality is a must. This is self explanatory as there is no reason whatsoever as to why anybody would want to be late whenever filing their tax returns. This is simply raises ones chances of getting an audit.
Hire a professional. Don’t be too overconfident, you should always consider hiring a tax preparer to work for you and sort things out. They are worth the added expense as you will be saved from any fines and hefty fees, but most of all they can help you stay out of the audit list of the IRS.
Read more about irs audits.