…Honesty is the best and only policy if you’re dealing with the IRS.
Every taxpayer hopes that he or she will never face an IRS audit. You could face this situation regardless of your occupation or income level and no matter how much money you’ve earned or received. There are ways to reduce the chances of being audited in 2020.
Be Honest
It’s tempting to want to lie on a tax form along with a job application or resume. You want to avoid looking incompetent or irresponsible with your spending. However, honesty is the best and only policy if you’re dealing with the IRS. This organization verifies all of the information that you provide on your forms. Tax audit prevention helps you to avoid penalties and warning letters, which are precursors to an audit.
Keep All Records of Earnings
Most people are honest and want to provide the most accurate information to the IRS. However, some people earn their income in many different ways while others move from one job to another. It’s easy to forget that you worked for a certain company several months ago, especially when you have deleted the company’s emails and phone numbers from your contacts list. It’s important to record every significant money-earning venture that you engage in if you earn $100 or more.
Use E-Filing Software
E-filing involves filling out a tax form online and submitting it through an online vendor. This work is easier than filing your taxes in person or by mail, which is more time consuming and laborious. A lot of people struggle with figuring out which forms to fill out and which lines to write down their figures. This confusion makes it easy for them to make errors that lead to audits. As a result, people who file their tax returns by paper commit more errors than those who file electronically.
Handle Your Deductions Properly
You may qualify for certain tax deductions based on your work expenses. You do not deserve deductions for every expense that you incur, such as fees for fuel and shopping trips to buy professional clothing. Any sign of fraud is a warning sign to the IRS. E-filing is recommended because many software vendors will provide of list of deductions that you’re qualified for.
Avoid Missing Information
Forms with boxes that are deliberately left blank are guaranteed to raise red flags. On any form, assume that the information in every box is required and not optional. An IRS official is immediately suspicious of missing figures and suspects that you are hiding relevant information.
Do Not Wait Until the Last Minute
Tax procrastination is a common fault of countless taxpayers. Completing your tax form at the last minute increases your risks of all types of errors, especially inaccurate or missing information. The faster you fill out the forms, the higher the rates of errors at 50% or more on some forms. Collect all of your records in one setting, and set aside two or three weeks to complete your taxes in full.
IRS offices have computers that flag tax forms for various reasons. If your deductions are too high, or if your employment information is incorrect, your tax return will stand out among all of the others. Since doing your taxes correctly is already a challenge, you should follow several, important tips to avoid having an auditor show up at your home or workplace. One tip is to hire experienced Los Angeles accountants to handle your tax audit preparation this year. Call (818) 478-3052 with your questions and to schedule your free consultation!
