Avoiding An Audit
Even if you aren't making millions, or even hundreds of
thousands, the thought of getting audited by the IRS is a strong
reality. Did you know that the amount of audits performed by the
IRS increased by around 35% in 2011? Even though the odds of
getting audited are in your favor with less than 1% of Americans
having to have their tax returns scrutinized, you still want to
make sure that you do not do anything or make filing mistakes
that may result in you setting off red flags with the IRS. Read
what to do if you are audited.
Below are a few of the less-evident situations
for steering clear of the IRS.
Always Utilize a Calculator
Experts indicate that the number one reason individuals set
red-flags off is a result of them filing returns with math
errors present. Even though these are likely naive, careless
mistakes, these mistakes can equate to a full-scale audit. Don't
get audited unnecessarily! At the very least, utilize a
calculator for all adding and subtracting. A calculator is never
wrong. However, even if you are a professor in Mathematics,
humans make mistakes! And when you are done with your returns,
prior to sending them in, double check everything! The IRS is
not going to choose returns to audit at random. If the IRS
believes that you owe more taxes, they will audit you...and have
up to three years from the filing year to decide to do so.
Clarify All Abnormal Deductions
If you file returns that encompass deductions that are out of
the normal range for items like charitable donations,
entertainment, etc. you are likely going to sound alarms with
the IRS. The IRS will assume that you are looking to write off
more than you are entitled to. In a situation like this, include
a note with your return detailing the scenario. For example,
suppose you moved offices during the year and your return
exhibits a large donation of office equipments, explain that you
moved and instead of lugging your old office with you, you
decided to upgrade with the purchase of all new office furniture
and equipment while donating the old. Writing some sort of
explanation is always going to be better than writing nothing
and letting the IRS come to their own conclusions. Cover your
tracks even more by saving all charitable receipts you receive
as well as store receipts for your new purchases.
Claim a Smaller Income
Did you know that someone filing a return with a gross adjusted
income of more than $1 million is 9x more likely to get audited
than an average middle-classer. Detailing further, the IRS
performed audits on 9.1% of those earning more than $1 million
gross adjusted income and only 1.05% of those earning less. So,
if you can defer income into the next tax year legally, DO IT!
However, it is very important that you communicate closely with
an accountant if this situation pertains to you. But you
probably already do since tax returns with incomes of this
amount or more are very tricky and can not be handled by your
Don't Brag On Any Social Media Sites
The IRS has the ability to review DMV and employment records for
determining if you have relocated to another state or received
any type of promotion. And with the advancement of the Internet
and Social Media, the IRS has even utilized popular sites like
Twitter and Facebook for uncovering scams and locating cheats.
So, if you participate in any type of social media site, be
careful what you say and/or pictures that you post. You don't
want to expose yourself as being one that is living larger than
you should be and as a result have the IRS thinking you earn
more than you actually do.
If You Are Self-Employed You Need to Be Super Cautious
The IRS has indicated that the largest area of the tax gap
(amount owed vs. amount paid) occurs in 'Schedule C'. These are
the forms for those that are self-employed. In fact, it has been
reported that self-employed individuals that generate incomes of
$100,000 - $200,000 annually were audited 5x more frequently
than those that are employed for someone else (not their own
boss). The basis being is that when you are self-employed, you
have a greater ability of writing off unproved deductions. The
IRS is aware of the amount of interest you paid on your car loan
and mortgage and the sum paid for the year to your employees,
however those that are self-employed do their books primarily on
the deduction side and therefore can easily falsify records.
Settlement Loans - Get rid of your tax debt instantly.
Paying Taxes on Tips
- Remember to take some money out for taxes.
for Paying Income Taxes - Everyone has to pay them.
Deductions to Avoid - Don't even try them. If you do,
you are likely going to end up getting in trouble with the
Apply Now -
How It Works -
Approval Requirements -
Credit Help Info -
Types of Personal Financing Opportunities Offered:
Personal Loans -
Credit Personal Loans
with Personal Loans
Copyright © 2012 - ChoicePersonalLoans.com