No one wants to be audited by the IRS. According to CNBC, here is a list of ways to help make sure that your return will not call attention to itself.
- Make sure your math is correct, because mistakes can cause you to be fined in the event of an audit, regardless of whether it was intentional or not.
- Make sure to report all of your income. Even freelance workers have to report their wages, which go on Form 1099, and the IRS will know if such income is not reported.
- Report charitable donations, but don’t inflate the amount. Document the veracity of all donations, and you’ll be fine…. not fined.
- Self-employed taxpayers may be tempted to write off a bunch of personal expenses as business losses, but this will send a red flag to auditors if it looks like you’re claiming too many losses.
- Too many business expenses will also put you in a suspicious light with the IRS. Make sure all purchases are ordinary and and necessary for your line of work. So, before you claim something as a business expense, ask yourself: Is this purchase absolutely necessary in order for me to perform my work duties?
- The home office deduction is one that is constantly being scrutinized because it’s actually a very narrow definition. According to the IRS, an office that’s located in your home must only be used exclusively and regularly for work in order to qualify. It must be a section of your house that is reserved strictly for business; nothing else.
- Be precise with the numbers on your 1040 form and supporting documents, and don’t round off to the nearest 100, because too many round numbers on your tax return can send up red flags to auditors.
"BUILD THE WALL" bumper stickers now on sale. (BUY NOW)
If you would like to receive Breaking News text alerts on a smartphone or tablet, download the DML APP which is completely FREE and easy to use. Go to the Google Play Store or the IOS App Store and search for DML APP. Be sure to keep the app’s notifications setting on. Another way to receive alerts is to text to 40404 the following message: follow @realdennislynch (be sure to put a space between the word follow and the @ symbol).
To see more stories like this, sign up below for Dennis Michael Lynch’s email newsletter.
Sign up to get breaking news alerts from Dennis Michael Lynch.
Great White Shark Stuck on California Beach (video)