If you are worried that you will have to suffer through an income taxes audit by the IRS, there are several steps that you can take to protect yourself. You should always try to file your taxes on time and seek our professional help if you are experiencing any problems that are preventing you from doing so. But even if you file on time, there are several other red flags that will send you straight into the hot seat across from an IRS agent. While some of these red flags can be avoided altogether, others can not be. By seeking out the advice of a professional tax attorney you will better your odds of avoiding an audit and you will be prepared should the IRS audit you.
One of the best ways that you can avoid an income taxes audit is to file your taxes on time. When you do not get your taxes filed and paid on time, it sends a red flag to the IRS. They will scrutinize late returns much more closely. If you happen to be late in filing your returns, even if you are several years late, the IRS will inevitably catch up with you and start collection procedures. Get your taxes done before you have to deal with the wrath of the IRS.
There are several other red flags that IRS specifically looks for when processing your income tax returns. They tend to look much more closely at the returns of people that earn over one hundred thousand dollars a year. But just because you are a higher wage earner, doesn’t necessarily mean that you will have to undergo an income taxes audit. The IRS will pay special attention to your return if your business has been audited and you are a shareholder or owner. They will also look more closely at your return if you claim high cash contributions to charities, if you have a high amount of deductions on your return, if your business expenses are high in relation to your income, or if you claim rental expenses.
There are a number of other factors that the IRS looks for in addition to the aforementioned list. It is important to remember that if you are eligible for deductions then you have every right to claim them, just make sure that your return is as complete and well documented as it needs to be in order to back up all of your deductions.