Tax Refunds & Advice

Worrying about a tax audit every year is no way to live your life. While there is always a chance that you will get hit with an audit, the odds are against this happening. To make sure that you have nothing to worry about, take the time to ensure that your return is 100 percent accurate. If you do this, an audit may still be annoying, but you can be rest assured that you will not get in any trouble.

1. Check your math more than once. The most common reason for a mistake on your tax return is a math related error. Make sure that you use a calculator, and that you double and triple check your work. A simple mistake could cost you a lot of money in penalties.

2. Never go overboard with your deductions. While there is nothing wrong with using legitimate deductions, stretching the truth could get you in trouble. When it comes to deductions, you need to remember two things: be honest, and keep track of each and every deduction. If you have a receipt, you can prove your claim.

3. Get help from a professional. They know what they are doing, as well as how to organize everything as to avoid an audit. Some professionals will even promise to work with you free of charge if the IRS decides to audit you.

In most cases, returns are audited anywhere from the time of filing up to 18 months. With that being said, the IRS can audit your return for up to three years. For this reason, you never want to throw out information from past years.

While there is no science to avoiding an audit, you can use the three tips above to better your chance of slipping through the cracks.     

There are many fears that can and will creep into your mind when you are filing your income tax return. With that being said, the most common fear is being audited. After all, nobody wants to deal with the IRS. Not only can they take a closer look at your most recent tax return, but they can do the same from years past. When it comes down to it, this is not something that anybody would have fun with.

The first thing that you should know is that only about one percent of individual returns are audited each year. As you can imagine, this is pretty good odds that you are not going to get picked. While there is no way of knowing for sure, one percent is a very small number to say the least.

The best way to tame this fear is to keep good records. As long as you can show the IRS why you did what you did, there is no reason for you to be worried. And remember, this is especially true if you are self-employed or run your own business. These filers always seem to be watched a bit more closely because of all the deductions and additional paperwork that is needed.

Do not let the fear of being audited scare you too much. Many people are so afraid of an audit that they do not take deductions that they have the right to claim. Instead of letting this happen to you, learn the rules and play fair. This will allow you to easily deal with an audit should the situation arise. 

If the IRS is going to audit you, there is not much that can be done. With that being said, there are some things that you can do to protect yourself against extensive problems if the time does come. Remember, just because you are being audited does not necessarily mean that you are going to get in trouble.

First things first, make sure that you are always 100 percent honest on your tax return. When you lie, it is going to make it more obvious to the IRS that you are one of the people they should take a closer look at. Additionally, lies will come back to haunt you big time if you are ever audited now or in future years.

In addition to honesty, organization is every bit as important. In other words, you should make sure that all of your tax related documents are kept in a safe place. If you receive a letter stating that you are being audited, you can then pull out all of the proper paperwork and supply exactly what the IRS is asking for. The worst thing that you could do is throw out your past returns and documentation because you think they are out of date.

As a last note, a CPA or tax professional can go a long way in helping with the two details above. They will make sure that your tax return is mistake free, and that all of your papers are put together in an organized fashion.

You may be audited by the IRS at some point in time. But as long as you never make any mistakes and save your paperwork, you will be fine. It may take time to ensure accuracy and organization, but if you do this you will never have to stress out about getting in trouble.