Finding yourself in the spotlight of an IRS sponsored tax audit can be frustrating as well as daunting. This is very preventable though. And although it seems to be common knowledge that the chances of that concentrated attention are low, few know how low those chances actually are.
Only about 1.5% of all taxpayers are audited by the IRS annually, which is obviously a very low number. For one, the IRS simply doesn't have the time and personal resources to launch complicated evaluations. And, of course, it takes a very red flag indeed to get the attention of an audit. Sometimes a suspicious tax credit amount or simply a large number of mistakes that appear out of bounds can flag an audit, but generally your chances are merely one in hundred of an audit if you make $25-100,000 a year. The more money you make, the higher your risk. That says a lot about the priority and purpose of an audit in the first place.
Though it’s an unlikely occurrence, it doesn’t hurt at all to double check your work as you go along. This is important even when it comes to simple entries of generic information, because if something is missing or wrong with your return, the IRS isn’t going to be able to psychically fill in the blanks or fix it for you.
If you have a large of amount of itemized deductions, an unusual proportions of business expenses and deductions and reported incomes and revenues that don’t quite fit the target for what the IRS considers in the normal range, you are going to increase the risk of an audit. Many tax returns filed every year are endlessly complex and sometimes barely fit into the criteria of eligibility for certain tax programs.
If you use a tax service like TurboTax Online as opposed to filing on paper, your chances of an audit decrease to almost zero. That goes for complicated corporate returns as well as your personal return.
They truly offer a streamlined and expertly informed solution to a task that can easily become messy, even for math and tax buffs. And if you’d like to know a little more about avoiding an audit and what the consequences of being audited can be, check out the site any time of the year for the information you need to do things the right way, the first time.
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