While most of us dread tax seasons, the last thing that anyone wants to deal with is an IRS audit. It is a misconception that when you get audited, you have done something wrong that has flagged your tax return. While that is the case sometimes, getting audited doesn’t necessarily mean that you have done anything wrong. Most of the time it has to do with an error that you made and need to fix. Mark Dicus & Company is here to talk about some of the most common reasons people get audited by the IRS.
What Happens if You Do Not Report All of Your Income to the IRS?
It may be tempting to not report all of your income to the IRS, but you more assuredly will get audited if that is the case. Even if you didn’t receive all of you 1099s, you still have to claim them as income. The company that you have dealt with will have to claim it all and if you don’t do it on your end, the IRS will want to look into the matter.
Mathematical Errors on Tax Return
Even when you double and triple check the number you are turning in on your tax return, there will be times that you make a mathematical error. It happens to the best of us. The best way to avoid making these errors is to use a tax professional to help you prepare your taxes. These errors will often lead to an audit.
What Happens if You File Wrong Status?
It may seem like a small enough error to file using the wrong status, but this is an important thing to get right. It is true that those that are married, or the head of a household will get more deductions, but the IRS will know if you are lying here. All they have to do is look at your W2 information and your taxes filed the previous year to put two and two together.
What Happens if You Claim Too Many Deductions?
When you own and run your own business, one big benefit is the deduction of all your expenses as well as your losses. However, you better make sure you have the paperwork and the receipts to back it all up. If you don’t, the IRS is going to come and ask for proof to back up what have filed, and you can face penalties.
Does the IRS Round Numbers Up or Down?
If you like numbers to always be evened out, this is one instance where you should just get over it. If the numbers aren’t even, you need to avoid rounding up. This will send up a flag to the IRS. They expect to see decimals that are accompanied by cents. You should be reporting the numbers exactly as they are on your W2 forms.
Tax Preparation, Accountants & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
If you have questions about filing your taxes, you can turn to Mark Dicus & Company for help. We will make sure you have all the documentation you need to help you avoid an audit in your future. Call us today!