So you got a letter from the IRS. Don’t panic, Audits are actually more rare then you think and less than 1% of Americans get audited. If you do receive an audit, this is the IRS asking for additional information. Below are the top 5 reasons an audit can be triggered.
1.Failing to report some income- The IRS knows all about your income because remember your employer must report as well. Reporting all income reduces audit up to 50%.
2.Claiming too many charitable donations– This one is easy. Make sure all charitable deductions make sense and are accurate. For example the IRS will question you donating $10,000 to a shelter when your yearly income was $30,000.
3. Reporting too many losses on a Schedule C– This is for the self –employed, only report losses that are directly related to your business, no personal expenses and hobbies.
4. More money more problems– This is true and direct, the more money you make the more the IRS will scrutinize your return. I advise anyone who grosses more than $60,000 yearly to find a licensed professional and allow them to represent you.
5. Using round numbers- Be precise and avoid estimations, Round to the nearest dollar. No more, no less. Most even numbers will make the IRS ask for proof and digging up detailed receipts is not fun.
Again audits are only to get more information, We are experts in audits. Got a letter from the IRS? Send us a copy [email protected] #Moneyismybusiness
