The IRS filing an audit is actually a pretty rare feat, but if it does happen you’ll be in for a harrying ride. Regardless of whether you’re in the right or wrong, it’s probably in your best interest to avoid an audit at all costs- so here are a few of the best ways to drastically reduce the odds that the IRS will come knocking on your door:
1. Be Honest
There’s a time and a place for trying to find loopholes, but when it comes to reporting income, deductions or credits, being honest is probably going to save you a lot of time, money, and explaining. Obviously there’s a chance you could get away with lying about your statements, but taking that risk could jeopardize plenty when you get audited. You should be prepared to provide evidence regardless of whether you work for a company or you’re self-employed.
2. Double Checking
When IRS agents look at your returns, the first thing they’ll look at is your data entry. Most of the time, you’ll have your figures right, but even a small slip up can bring the IRS to your door demanding an audit. Fortunately, double checking figures is actually a pretty easy task. If you’re using a software, they generally have checking criteria built into their coding, but if you’re filing a return on your own, it’s best to wait for all of your statements to come in before filing. After you’ve filled out all the pertinent data, you just need to see if the data matches. Then you’ll be good to go.
3. Understand Deductions
Auditors love to look at the deductions you may or may not have noted when you file a tax return, so knowing how to properly claim deductions can save you an audit. Legitimate business expenses can be considered deductions, like taking a client out for lunch.
4. File Electronically
Paper returns on average tend to have a higher rate of error when compared to electronically filed tax returns. Thus, if you really want to avoid an audit, it’s probably in your best interest to e-file. The Internal Revenue Service maintains that filing returns electronically can “dramatically reduce errors,” lowering the odds of an audit.
Regardless of how many preemptive measures you take to avoid getting in trouble with the IRS, there’s still a chance you could be audited. If it happens and you’re in the wrong, you’ll need an experienced team of tax consultants to help ease you along the complicated set of guidelines and options available to you. The Defend Tax Payer has a wealth of knowledge dealing with nearly every tax scenario and can help you get back on your feet. Your future is brighter with the Defend Tax Payer!