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How to avoid an IRS Audit...
How to Avoid an IRS Audit:
No one, and we mean no one, looks forward to dealing with the IRS, especially when it comes to an audit. While there's no one magic bullet to avoid being audited, there are several steps you can take to minimize your chances of being on the IRS' radar. Here are some practical tips to help you stay on the IRS’ good side.
If you find yourself owing $10,000 or more to the IRS or a state taxing entity, reach out to us today for a FREE consultation at info@libertytaxdefenders.com.
1. File Accurately and On Time
The simplest way to avoid an audit is to file your tax return accurately and on time. Double-check all your information for errors, ensure all income is reported, and keep your records organized. Filing electronically can also reduce mistakes, as most tax preparation softwares typically check for common errors.
2. Report All Income
Make sure you report all forms of income. This includes wages, freelance earnings, interest, dividends, and any other sources. The IRS receives copies of your W-2s and 1099s, so if you miss something, they’ll know. In other words, they know how much money you make.
3. Keep Deductions Reasonable
While you should take advantage of all the deductions you’re entitled to, make sure they’re legitimate and reasonable. Large, unusual deductions can raise red flags. For instance, claiming an unusually high amount of charitable donations compared to your income can trigger an audit.
4. Be Cautious with Business Expenses
If you’re self-employed or own a business, be meticulous with your expense reporting. Only claim business expenses that are ordinary and necessary for your industry. Keep detailed records and receipts to substantiate your claims. And do not commingle personal and business expenses.
5. Avoid Excessive Round Numbers
Using round numbers excessively can make the IRS suspicious. Real expenses rarely end in perfect round numbers. Precision shows that you’re reporting actual amounts rather than estimates.
6. File for the Right Status
Choose the correct filing status for your situation. Whether you’re single, head of household, or married filing jointly, make sure your status accurately reflects your life circumstances.
7. Consider Professional Help
If your tax situation is complex, consider hiring a tax professional. They can ensure your return is accurate, help you maximize your deductions within legal limits, and provide advice specific to your financial situation.
8. Review Past Returns
Look back at your previous returns to ensure consistency. Sudden, unexplained changes in income or deductions can attract attention. Consistency over the years indicates stability and accuracy.
Conclusion:
While there's no surefire way to avoid an IRS audit, following these tips can help reduce your chances. Accuracy, honesty, and thorough record-keeping are your best defenses. By taking these steps, you can handle tax season with confidence and keep the IRS at bay.
If you do find yourself on the wrong side of an IRS notice, engaging a tax relief professional such as your premier tax resolution experts at Liberty Tax Defenders can provide personalized advice and assistance, ensuring you remain compliant while minimizing your tax burden.
Don't forget to reach out to us today for a FREE consultation!
To your success!
P.S. Make sure you get your FREE copy of our SPECIAL REPORT: "The 7 Secrets The IRS Does NOT Want You To Know!" (simply click on the link in the previous sentence, scroll down to the second section of our home page, and download your copy today!)
Or, email us at: info@libertytaxdefenders.com for your FREE copy.
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