One of the most commonly asked tax questions is about how to avoid an audit. The answer might surprise you. Right now, the IRS is auditing less than 1% of all tax returns, meaning that your odds of being audited are actually quite low. The team at Havig Tax understands that this is still a concern for many, however, so we can help you make sure that you do all that you can to reduce your audit risk and then be in the best possible position should you get a letter from the IRS. Here are some tips to get started:
1. Keep all documentation: Making sure that you have all paperwork and tax documentation in the event of an audit. An audit can be as simple as being asked to provide background information or to verify one piece of information. Generally, you should plan to keep all documentation a minimum of 3 years, but our team recommends 7-10 years just to be safe.
2. Stay honest: Staying in compliance with all tax law is the best way to both reduce your risk of an audit and then to put you in a good position if you are ever audited. Our tax professionals keep up with the latest tax law and can ensure that your returns are correct.
3. Check your math: Very minor math errors can trigger an audit so be sure that you take time to double check your numbers. You may have an easier time doing your taxes online versus on paper so that the computer can do some of this work for you.
4. File on time: Being late with your returns is an immediate red flag for a potential audit so filing on time is one easy way to reduce your audit risk.
5. Do not rush: Take your time with your taxes so that you do not make a careless mistake. Like math errors, keying errors can cause the IRS to look more closely at your return.
6. Make sure that your deductions are legitimate: Deductions are one area of tax returns that the IRS takes note of. Make sure that all of your deductions are legitimate and that you have the business purpose or backup documentation that you need should an audit occur.
7. Get tax support when you need it: Whether you are filing your personal income tax returns or you are a business owner, you should always get the tax support you need, rather than run the risk of an audit because you are unable to complete your returns correctly.
Havig Tax specializes in providing tax support to individuals and businesses in Anoka County and around the country. For more information, contact us at (763) 325-4400.