IRS Audit Red Flags

Tax season is here again... along with the question a lot of people ask: Why are some tax returns audited by the IRS while most are ignored?The IRS audits only about one percent of all tax returns every year.{} So the odds are definitely in your favor.{} But there are some factors that increase your odds of being in that one percent. {}Kiplinger is out with it's "Dirty Dozen".{} 12 red flags that increase your chance of drawing some unwanted attention from the IRS.{} They include:

  • Failure to report all taxable income.{} A mismatch of your 1099s and W-2s with the income shown on your return sends up a red flag.
  • So does claiming large charitable deductions, especially if they're disproportionately large compared to your income.
  • Business meals, travel and entertainment are favorite deductions for self-employeds.{} Alarm bells go off if they seem too large for the business.
  • Plus, IRS scrutiny if you claimed the home-buyer credit. {}

But one of the biggest reasons that people get that dreaded letter from the IRS?{} Math mistakes they make on their tax returns.{} So double check before sending it in.Click here for Kiplinger's "Dirty Dozen"