10 Ways to Avoid a Tax Audit

10 Ways to Avoid a Tax Audit

10 Ways to Avoid a Tax Audit

We have culled together multiple lists to identify the top 10 ways to avoid a tax audit.  We will list our top 10 at the bottom of the article.  If you’ve never been audited by the IRS, you’re likely doing a lot of things correct.

However, if you’re concerns that keep you up at night at the mere thought the IRS might choose you, there are some things you can do to help prevent, or at least decrease being selected.

Although, even if a tax return is completed 100% correctly, we routinely see ultra-high net worth individuals and families get audited more often than others.  The prevailing thought amongst auditors is likely, more wealth typically comes with more complex tax strategies and more opportunities to catch an error.

Tax Audit Tips From GROCO.com

Here are 7 simple strategies for avoiding an IRS audit:

  1. Tell the truth when you file your taxes
  2. Get organized and keep detailed records
  3. If you’re self-employed keep track of everything
  4. Avoid unreasonable deductions and keep track of all of them
  5. Try to avoid fluctuations in your income
  6. Don’t make too many charitable donations
  7. Let a professional prepare your taxes

 

From LegalZoom

Here are 10 ways to avoid a tax audit:

  1. Don’t report a loss
  2. Be specific about expenses
  3. Provide more detail when needed
  4. Be on time
  5. Avoid amending returns
  6. Match up all your paperwork
  7. Don’t use the same numbers repeatedly
  8. Don’t take excessive deductions
  9. Use Schedule C
  10. Don’t leave questions blank

 

From Forbes

10 Ways to Mostly Avoid a Tax Audit:

  1. Check your math
  2. Be as normal as possible
  3. Double check Social Security Numbers (SSNs)
  4. Call home
  5. Go through your mail
  6. Be thoughtful about your deductions and credits
  7. Make money
  8. But don’t make too much money
  9. Don’t make up stuff
  10. Fix your mistakes

 

From WSOC-TV

Charlotte, NC, 10 tips from Action 9 to Avoid IRS Audit as Tax Due Date Approaches:

  1. Double check your numbers
  2. Give the exact dollar figure
  3. File electronically
  4. Be careful claiming your car as your office
  5. Accurate reporting of spending and earning
  6. Be careful with medical and dental deductions
  7. Report extra income
  8. Claiming home office
  9. Proof of donations
  10. Earned income tax credits

 

Now, our recommendations are as follows:

  1. Be honest, accurate, and tell the truth!
  2. Get organized and keep detailed records (up to 7 years in most cases).
  3. Avoid unreasonable deductions and income, see #1 above…
  4. If complex, seek professional help (ounce of prevention = a pound of cure)!
  5. File electronically
  6. Plan ahead to reduce income fluctuations and surprisingly large donations.
  7. Use exact numbers that tie to receipts, 1099 forms and anything reported to IRS.
  8. Carefully consider the risk/reward aspect to all tax strategy decisions.
  9. Double check numbers: math, social security, & bank account if filing electronically.
  10. If self-employed, do all of the above but in greater detail, especially #4!

It’s impossible to completely rule out the possibility of an IRS audit, but by taking these measures you can greatly reduce your chances of being chosen for an audit. If you feel like the IRS might single you out for an audit, then contact the professional CPAs and tax advisors at GROCO for help.

We hope you found this article about “10 Ways to Avoid a Tax Audit” helpful.  If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page  or our website at www.GROCO.com.

To receive our free newsletter, contact us here.

Subscribe our YouTube Channel for more updates.

Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

 

Alan L. Olsen, CPA, Wikipedia Bio

 

 

GROCO.com is a proud sponsor of The American Dreams Show.

 

American-Dreams-Show-Accounting-firm-in-ca-cpa-tax-advisors-groco-alan-olsen

The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:

Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…

Untitled_Artwork copy 4

MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness.  It’s mission statement:

In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.

Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.

Posted in

Taking Over the Family Business with Pamela Kan, President of Bishop-Wisecarver Corporation

Taking Over the Family Business with Pamela Kan, President of Bishop-Wisecarver Corporation See Pamela’s recent interview with Alan Olsen on Youtube: https://youtu.be/-KvsbCcfmaM Pamela Kan has been the President of Bishop-Wisecarver Corporation since 1999. She is a highly respected leader in the manufacturing and engineering industry, and has been instrumental in growing the company into the…

Igniting Others With Kary Oberbrunner

Igniting Others With Kary Oberbrunner See Kary’s interview with Alan Olsen on Youtube: https://youtu.be/IfPrM7b9LII Do you struggle through life feeling lost? Do you want to find your dream job or perform better at your current day job? Are you looking for a new secret weapon for mastering life? Kary Oberbrunner is a Wall Street Journal…

Tax update with Ron, episode, constitution

Episode 31: IRS inflation related adjustments to tax rates

Today we discuss:
-IRS inflation related adjustm…

Thanksgiving week and gratitude

Thanksgiving week and gratitude

Thanksgiving is one of my favorite times of the year because it helps me to remember the many things I have to be grateful for: my family, relatively good health, friends, job, religious freedoms (I should probably use more often), and too many other blessings to list. Not to mention the Thanksgiving meal, mashed potatoes,…