When you’ve filed your extensions or completed your returns by their deadlines you may rejoice with well deserved time to kick back and relax, knowing the IRS will be off your back. However, you could suddenly be selected for a tax audit! Oh no! That would turn your relaxation time into a nightmare. Learn how to avoid being audited with our following tips below so you can get the relaxation time you deserve after tax season.
How to Avoid Being Audited
The key to avoiding an audit is to be honest on your forms. Answer all of the questions truthfully. This means report all of your income, even the amount you’ve made from side businesses like helping out with catering on the weekends or being a Lyft driver for some extra money here and there.
Don’t round up or down. Be honest about your numbers by entering the exact amount. This includes the amount you donated to charity. Rounding up or saying you donated more than you actually did can raise some red flags pretty quickly.
Be honest about your deductions, don’t try to take advantage of the IRS. For example, you can only deduct for your home office if you actually have a portion of your home that’s dedicated to work only. If you work in the living room or at the kitchen table, then those portions of your home aren’t solely dedicated to your work.
Another example includes claiming children as dependents. Make sure your children qualify. If your child isn’t attending college you can claim them up until age 19. If they do attend college you can claim them until they’re 24. Don’t try to sneak by claiming your kids as dependents if they don’t qualify.
Be detailed. It’s always best to include notes as to why something on your form is different than last year. If your charitable contribution is larger than normal, then explain that your business earned more than ever this year, so you had more to donate.
Know when the deadline for your form is. You don’t want to file late or pay the amount of taxes you owe late or the IRS may decide to take a closer look at you. Also, be sure to file the correct form. For example, Form 990 has the 990-EZ, 990-N, and 990-PF! Filing the wrong one could put you in a pickle.
If you need more time to file you can quickly and e-file for an extension for a few different types of returns online.
Just be sure to keep in mind that extensions only extend the amount of time you have to file your return, not to pay any taxes owed. Any amount owed must be paid in full to the IRS by the original deadline for your return.
Slow down and make sure that you enter all of your information correctly. Spell your name right, enter your social security number correctly. Before submitting your return make sure to double check all of your information.
Oftentimes e-filing is the best method because fewer mistakes are made on electronic forms. Most e-file providers, like ExpressExtension, offer a step-by-step guide to help you correctly complete your form in a matter of minutes and have an audit check put into place to catch basic errors.
It’s also important that your information such as your name address, social security information, EIN, business information, and more matches what the IRS has on file. You can verify your information by calling the IRS directly at 1-877-829-5500.
Relax, Without Being Audited!
The key to avoiding an audit from the IRS is to correctly file your return by the deadline or your extended deadline. Also, be honest and make sure that all of your calculations are correct. Last but not least, make sure all of your information is entered correctly.
For more tax tips visit ExpressExtension.com and be sure to share your tips about how to avoid being audited in the comment section below.