Everyone dreads the thought of being audited by the Internal Revenue Service. And rightfully so, receiving an audit notice is bound to make anyone feel anxious. There are some things you can do as you prepare your taxes to avoid getting contacted by the IRS for a tax audit. Here are five tips to help you as you sit down to prepare your return:
- E-file your tax return. Filing returns electronically can reduce errors and therefore lower the odds of an audit. Filing your return electronically also means not worrying about the return getting lost in the mail, while also reducing the risk of a fraudulent return being filed on your behalf.
- Make sure things match. Seems simple but double check your tax return numbers prior to filing. Make sure what is on the return matches the W-2s, 1099s and other statements you received and make sure figures are listed on the correct lines.
- Typos and omissions. Double check your and your dependent’s social security numbers and your address to make sure they are correct/included.
- Large charitable contributions. It is wonderful to be charitable, make sure you have the proper receipts and documentation for the donations you have made throughout the year. As you give, collect letters or receipts from charities for both monetary and in-kind donations, especially those over $250.
- Consider incorporating if you are self-employed. Self-employed individuals who file a Schedule C rather than a corporate return are typically more likely to be audited. You may want to consider incorporating as a C corporation or making an S corporation election instead to report your business revenues and expenses.
It is your right to claim the deductions that you are entitled to take, the important part is making sure you have the proper documentation for your income and deductions in the event you are audited. Need assistance filing your return this year? Start here. Our team of tax experts are on hand to help relieve the stress that comes with tax season. Contact us today!
We’re excited to bring you thought leadership as we spotlight and highlight key contributors throughout our firm. And the knowledge doesn’t end here. Check back each month for new content that will include industry trends, thoughtful advice, and details about how BerganKDV and our team of experts can be the resource you need. If you’re looking for professional services the Midwest way, start here!