The Wilton Manors Accountants of Sterling Accounting know that an IRS audit is definitely unwelcome.
Fortunately, audits are a pretty rare thing. CNBC reports that of 148 million individual tax returns in 2016, just .7 percent were audited.
That’s a very small percentage. But it’s sure no fun if you happen to fall into the unlucky category. Still, there are things you can look out for to make sure the IRS doesn’t flag your return. Here are some tips.
Report all your income
The forms you get from those with whom you work showing the amount they paid you also go to the IRS. So you’ll want to be sure they match up.
“If there’s a discrepancy, it generates an automatic correspondence from the IRS,” April Walker, lead manager for tax practice and ethics at the American Institute of CPAs, says. “That’s an easy thing for them to notice.”
If you’re self-employed, you need to keep track of your expenses and be able to document them.
Often, people take leeway when it comes to expenses. That can come back to bite you if you don’t have documentation. “If you put a category that says ‘other’ and have a lump sum instead of breaking it out by office supplies or other types of expenses, it can be a red flag,” Walker said.
If you keep more than $50,000 in an overseas account, you need to report it on your tax return.
If you were supposed to file and didn’t, that can cost you $10,000.
Hire a professional
The Wilton Manors accountants of Sterling Accounting live and breathe this stuff. We are expert at finding overlooked deductions, and stay up to date on tax laws and regulations.
In other words, we are happy to help you navigate your taxes with a minimum of pain.