Will Your Tax Return Draw the IRS’s Attention?

Businessman,Holding,Magnifying,Glass,And,Tablet

No one wants to experience a tax audit. The good news is that most people never will have to go through that experience. The IRS simply doesn’t have the time and resources to audit every tax return. In fact, the IRS only audits about 1 percent of all returns. That means most people don’t have to worry about being audited. However, if you want to be extra careful and decrease your odds off being chosen even more, there are some tips to keep in mind when you file your tax return.

There are some red flags that could increase your chances of catching the IRS’s all-searching eye. Here are a few of them:

  • You make a lot of money
  • Your deductions are higher than normal
  • Your charitable deductions are high
  • You don’t report all taxable income
  • You own or run a small business
  • You claim the alimony deduction
  • You claim a loss for a hobby
  • You claim rental loss
  • You deduct a lot of business expenses: travel, entertainment and meals
  • You don’t report a foreign business account
  • You cash out some of your 401k or IRA early
  • You claim large gambling losses or don’t report big winnings

These are some of the most common ways to get the IRS’s attention, but if you avoid these kinds of things you might reduce your chance of an audit.

However, there is no full-proof way to avoid an audit, but keep this in mind: as long as you are being honest on your taxes you don’t have anything to worry about. Even if you are selected for an audit you will come out unscathed if you have nothing to hide. Another thing that can help is to contact a professional tax preparer to do your taxes for you. This will decrease errors and your chances of being selected for an audit. Contact GROCO if you need help with your taxes. Call 1-877-CPA-2006, or click here.

Posted in

Which Tax Breaks Will Be Restored for 2014?

It seems like every year at this time the conversations start to creep up in the media regarding which tax breaks will be renewed and which breaks will get the permanent axe. This year is no different as Congress already let more than 50 such tax breaks expire at the end of 2013. Now the…

Helpful Deduction Tips for Collectors

Are you a collector? Have you ever wondered if you could donate the items you collect to a charity auction for tax break purposes? If you are considering this scenario, there are some things you should know. The first thing you need to make sure of is that the charity you are considering is actually…

Coin, Stack, With House, Model, Savings, Plans, For, Housing,,Green

Ask Yourself These Key Questions When Planning Your Estate

Almost no one can choose when he or she will die, but everyone can choose how his or her assets will be handled when that time comes. It’s really just a matter of having a current and effective estate plan in place before you go. Estate planning is a wide subject with many aspects; and…

Another Senator Says It’s Time to Go After the Wealthy

Another Senator Says It’s Time to Go After the Wealthy

Another Senator Says It’s Time to Go After the Wealthy We all know that death and taxes are two certainties in life. However it seems that we should probably add the argument that the wealthy should pay more taxes to that list of certainties. According to reports, Senator Bernie Sanders of Vermont recently shared his…