Are you at risk of a federal tax audit?

IRS audit documents with clipboard on a desk.

The Internal Revenue Service only audits approximately 1 percent of all individual tax returns the agency receives each year, but there are certain red flags that could make yours more likely to be chosen. Below are 10 indicators that could potentially make you a target of an IRS audit. 1. Leaving out information. If you forget to complete a line…

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The impacts of the type of car travel a taxpayer is claiming a deduction for

Man driving for ride sharing service checking app

Among the deductions individuals can claim on their taxes are deductions for automobile operating costs related to certain activities. Among the car travel a driver might be able to deduct such costs in relation to are: travel related to service to charities, travel for moving purposes, travel for medical purposes and business travel. Now, what specific type of travel a…

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How a retiree acts regarding their retirement accounts could impact audit risk

When a person is in their retirement years, certain things can have big impacts. One of these is what actions they take when it comes to their retirement accounts. Among the implications such conduct can end up having are tax implications. This is because there are numerous tax rules related to such accounts. Among these are the minimum distribution rules.…

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What documentation can play a big role in a small business audit?

Tax professionals conducting an audit

One thing that can have very big impacts on a small business when it is audited by the Internal Revenue Service is how prepared it is going into the audit. There are a variety of things it can be important for a small business owner to prepare for when they discover their company is going to be audited. One are…

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What a person says and does during an audit matters greatly

Book about tax audit and calculator on a desk.

A common desire a person can have upon discovering they are being audited by the Internal Revenue Service is a desire to get the process over and done with as quickly as they can. This is a natural response to a stressful situation, which audits most certainly can be.  However, it is important for a person to not let their…

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The end of an audit

Tax professionals conducting an audit

The end of a federal tax audit can be a time of many important decisions. The first big decision comes before the Internal Revenue Service. Tax officials will decide, based on the findings of the audit, whether or not changes should be made to the taxpayer’s tax return. If the IRS decides no changes should be made, the person’s tax…

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Higher income, higher audit likelihood

stack of one hundred dollars notes

A person’s income level has considerable implications when it comes to tax issues. For one, it can influence how likely they are to be subjected to an audit by the Internal Revenue Service. Generally, the more income a person has, the higher their likelihood of an IRS audit is. This can be seen in U.S. audit rate statistics for last…

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Good record-keeping vital when claiming deductions for donations

Handheld Magnifying glass inspects paper documents

There are many things individuals are allowed to claim deductions for on their federal taxes. One of the things that quite a few taxpayers claim deductions in connection to are donations to charitable organizations.  Now, there are a plethora of rules regarding charitable giving deductions. Among these are the documentation rules related to such deductions. When a taxpayer claims a…

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Avoiding audit triggers

Stamp IRS audit and accounting documents.

The Internal Revenue Service looks at a lot of different factors in its audit screening and there are a variety of different things that could potentially be triggers for an audit.  One thing that can be an audit trigger is the information a person gave on their federal tax returns not matching information reported by third parties, such as information…

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IRS audits down

IRS audit documents with clipboard on a desk.

It is a word that can instantly fill a U.S. taxpayer with anxiety: audit. Tax audits are one of the many things the Internal Revenue Service uses as part of its tax enforcement efforts. Being audited by the IRS can be a worrying and intimidating experience. Lately, IRS use of audits has been going down. The IRS audit level for…

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