Posted By: Dr. Frugal in Taxes on 08/04/2007 at 20:58:26
Nobody likes to have the taxman come knocking on their front door. There are a few simple steps you can take to reduce your chances of being audited, but if you're one of the 0.5% of Americans randomly chosen for an audit, don't freak out. Being prepared is more than half your battle.
The most basic thing you can do to reduce your chances of being audited is to make sure there are no math errors in your IRS return. Too many errors will red flag the return for review. Make sure social security numbers for both you and your dependents are accurate. If you won't be able to file your return by the April 15th deadline, file for an extension beforehand. Attach an explanation for anything that's not obvious. For example, if you report an amount that differs from the amounts on your W2's or 1099s, explain the reason. Be sure to sign your return.
Some steps, such as filing Schedule C for self-employed individuals or claiming the home office deduction, will increase your chances of being audited. As long as you reported everything accurately and have the documentation to prove it, you have nothing at all to worry about.
No comments yet. Future commenting has been disabled.
Making Tax-Wise Financial Decisions
Do I need a CPA?
Types of Federal Tax Return Forms
Standard and Itemized Deducations