Tax Tips To Avoid An Audit - Fox 2 News Headlines

Tax Tips To Avoid An Audit

Posted: Updated:

How To Avoid An Audit

-Check your figures. Math mistakes are easily found and raise eyebrows

-Don't under report income. Remember your W2 and other incomes are also reported to the IRS separately and compared

-Keep it simple. If you file Form 1040-EZ, pay rent, don't have children and make a modest income, there is virtually no chance you will be audited unless something's really out of whack.

-File electronically. The error rate for a paper return, the IRS reported, is 21 percent. The rate for returns filed electronically is 0.5 percent.

-Taking Large Charitable Deductions.  The IRS knows what's normal for your income level.

-Claiming Rental Losses. There are specific rules for investors, passive losses and those in the business. Be careful

-Deducting Business Meals, Travel and Entertainment. Watch out it is the number one place for fraud.

-Claiming 100% Business Use of a Vehicle. An eye opener, particularly if it's your only car. Some people inappropriately take extra expenses on top of the 'standard mileage deduction.'

-Writing off a Loss for a Hobby Activity. You must report any income you earn from a hobby, and you can deduct expenses up to the level of that income. But the law bans writing off losses from a hobby.

-Claiming the Home Office Deduction. Beginning with 2013 returns, you have a simplified option for claiming this deduction. The write-off can be based on a standard rate of $5 per square foot of space used for business, with a maximum deduction of $1,500. The IRS is watching this.

-Running a Small Business. Small business owners in cash-intensive businesses (taxis, car washes, bars, hair salons, restaurants and the like) are a tempting target for IRS auditors.

-Failing to Report a Foreign Bank Account. The IRS is intensely interested in people with money stashed outside the U.S., especially those in tax havens.

-Engaging in Currency Transactions . If you make large cash purchases or deposits, be prepared for IRS scrutiny.


If you do get selected for an audit, don't forget about Form 911. It's used to request help from the Taxpayer Advocate Service. The number might seem like a joke, but the service is an independent department of the IRS that helps people who can't afford professional representation.

 

  • Local NewsMore>>

  • After 27 Years, The Showboat Casino In Atlantic City Closes

    After 27 Years, The Showboat Casino In Atlantic City Closes

    Monday, September 1 2014 1:24 AM EDT2014-09-01 05:24:50 GMT
    The Showboat Casino in Atlantic City has cashed out for the final time. The boardwalk staple of 27 years closed its doors for good at 4 p.m. Sunday.
    The Showboat Casino in Atlantic City has cashed out for the final time. The boardwalk staple of 27 years closed its doors for good at 4 p.m. Sunday.
  • 3 Council Rock High School South Students Killed, 3 Hurt In SUV Crash

    3 Council Rock High School South Students Killed, 3 Hurt In SUV Crash

    Monday, September 1 2014 1:23 AM EDT2014-09-01 05:23:05 GMT
    Authorities say an SUV carrying six young people overturned in northeastern Pennsylvania, killing three and injuring the others.
    Authorities say an SUV carrying six young people overturned in northeastern Pennsylvania, killing three and injuring the others.
  • Summer Heat Returns

    Sunday, August 31 2014 5:14 PM EDT2014-08-31 21:14:08 GMT

    Summer is not over just yet!  90 degree temperatures will take us into September.  Much of the week ahead is looking hot with temps in the 90's and upper 80's.

    There is a chance of scattered showers and thunderstorms Monday and Tuesday.

    Unsettled weather will continue through Labor Day with temperatures soaring in the 90's.  We aren't looking at a washout but there will be pop up showers and thunderstorms in the afternoon and evening on Monday. 

    Monday (90/72): Clouds/Storm

    Tuesday (93/71): Clouds/Storm

    Wednesday (87/63) Mostly Sunny

     

     

Powered by WorldNow

WJBK-TV | Fox 2
16550 West Nine Mile Rd.
Southfield, MI 48075

Main Station: (248) 557-2000
Newsroom: (248) 552-5103

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices