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What might trigger an audit?

On Behalf of | Mar 23, 2017 | Tax Law

Sometimes an audit happens by chance, but in many other cases, it happens because of some sort of discrepancy that the IRS discovers in your tax filing. It can be extremely stressful to be audited when you have put many hours into sorting all your paperwork and counting and recounting your figures. An audit can cause an individual to feel frightened and question the accuracy of their filing.

What kind of issues in your tax filing could trigger an audit? The answer that most people would likely think about first is an error in math. Sometimes we write in the wrong number or accidentally leave off a zero somewhere. Although these are honest mistakes, you could still be fined for one of these mistakes so it’s important to be certain of your facts. If your taxes show a lot of round numbers, it could make it appear as though the numbers are not accurate.

Another issue that may come up is if your numbers seem excessive when it comes to business expenses. If you’re a writer but you claim ski boots as a business expense, can you prove that this expense was in some way part of a project? Was it necessary for the project? These are all questions that you may need to be able to answer during an audit. Take the same considerations when deducting home office expenses.

Finally, did you donate money to charity? If your charitable donations are large compared to your salary, it may look suspicious.

Some of these things alone may not seem like a big deal but in the long run, you want to make sure that everything can be proven and that everything is accurate.