No one likes to file taxes. Even when you may be expecting a refund, filing can be extremely stressful, confusing, and frightening. In addition to trying to make sure all of your numbers add up and you’re using the right forms, you constantly have the worry that a single mistake may cause you to be audited.
However, there are easy ways to decrease your stress, and help prevent the worry of an audit come tax time. Simply follow these tips while filling out your 1090, 1040, and W-2 to avoid an IRS audit flag.
Dos and Don’ts to Prevent a Tax Audit
- Use a calculator. Although some math errors are expected on tax returns (and generally fixed and billed by the IRS), too many errors will cause your return to be flagged for carelessness and potentially audited. Therefore, to avoid too many mistakes and the unwanted attention of an IRS audit, double-check your numbers and arithmetic with a calculator.
- Don’t give the IRS reasons to doubt your numbers. Make sure your return makes sense, especially if you’re reporting deductions. If your numbers are way outside the norm or heavy-sided (reporting deductions of $10,000 when your yearly income was only $15,000), the IRS will begin to question whether you’re underestimating your income or over-estimating your deductions, raising a flag for an audit.
- Report all income. The IRS compares your employer’s reported payments with your tax returns, so make sure you enter all the information on your 1040s, 1099s, and W-2s from all of your employers (previous and current within that designated year) to prevent inconsistencies.
- Don’t forget your marital status and number of dependents. If the number of dependents listed on your return varies from year to year without explanation, or if the IRS discovers that you’ve lied about your marital status, your entire return will definitely be flagged for an audit.
- Don’t lie. Although you may think you’re being crafty or that you’ve found a loophole to get out of paying your full tax amount, the IRS is very good at finding discrepancies. It is extremely diligent about checking, re-checking, and investigating possible fraud, and if your audit doesn’t go well, you could wind up facing jail time. Don’t take the risk; be honest and avoid the audit.
If you’ve recently been notified that the IRS will be auditing your tax returns, or if you’re worried that you may be audited, contact us today. We can help you avoid the stress, irritation, and possible criminal charges that an accidental error may cause. Don’t allow a math mistake to cost you—call now for a consultation and review of your case. We’re here to help you understand and get through your audit unscathed.
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