7 Audit Flags for the IRS
Getting ready to file your taxes? Although it is commonly said that less than 1% of returns are audited, high income earners and those claiming business or rental property losses appear more subject to IRS scrutiny. While no one knows exactly what triggers an IRS audit, here are 7 audit flags the IRS may look for:
- The use of many round numbers, especially when it comes to expenses being claimed.
- The use of the word “Consultant” under the Profession field. Consulting has the potential to encompass a broad spectrum of vague services which may lead to questionable expenses being claimed for deductions. So the more specific you are regarding your profession, the better.
- Being self employed.
- Being employed by a company but also showing a business loss on the side to offset W-2 income.
- Large deductions for travel and entertainment, or unreimbursed job expenses.
- Drastic changes in income from one year to the other.
- Itemized deductions that are over 25-30% of your income.
To learn more, to get your tax returns prepared, or to simply get a second opinion on tax returns already prepared, feel free to contact me. As always, I’m happy to help!
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