With tax season officially behind us, many filers are keeping an eye on their mailbox for their refund checks. But what happens if there’s a problem with your returns, and the Internal Revenue Service (IRS) decides to audit you?
What is an IRS audit?
At its core, an IRS audit is a close examination of your tax returns and financial information to ensure that you’ve reported everything correctly according to that year’s tax laws.
How likely am I to be audited by the IRS?
Two words: highly unlikely. According to IRS statistics, 0.6% of filers were audited last year – just over one (1) million out of 196 million people. Going back to their own data, it’s generally people in higher tax brackets or those who file no income at all who are most likely to be audited by the IRS. However, there are a few things you could do – unintentionally or not – that could easily trigger an audit.
Making simple math errors. Mistakes can happen to anyone, but if you make them on your taxes, they could cost you heavy fines.
Not reporting some of your income. It can be tempting to omit cash from a side hustle, but the chances are better than average that the person or business paying you that cash on the side has generated a 1099 form to keep track of the transactions. Find out what needs to be included on your 1099.
Not having the proper documentation for charitable giving. There are two (2) simple rules to remember when it comes to claiming charitable donations on your tax returns: (a) don’t file fake donations, and (b) make sure you have the right documentation for any charitable donations you do include.
Rounding up to even numbers. Rather than guesstimating deductions or extra income to round numbers, be exact with your calculations.
Being contacted by the IRS about an audit can be very unnerving. That’s why we urge you to contact the experts at Advance Tax Relief, LLC to discuss your case with one of our tax relief attorneys in Los Angeles.
To schedule your initial free consultation please contact Advance Tax Relief at 713-300-3965 or visit http://www.advancetaxrelief.com to learn more.