Worried About a Tax Audit? Here’s What One Tax Expert Has to Say

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In a nutshell, you don’t have to worry so much. 

At this point, many people are busy finalizing their taxes. That means now is definitely the time to make sure you have all of the right documents you need to get your return done, from your mortgage interest statement to your various 1099 forms.

Completing your tax return is definitely something to feel good about. But even once you submit that return, your head may not be clear of tax-related worries. That’s because there’s always the lurking possibility of having the IRS audit your taxes.

Mark Steber, Chief Tax Information Officer at Jackson Hewitt, says that statistically speaking, the IRS audits very few tax returns each year. So your chances of the IRS needing to take a closer look at your return are pretty low to begin with.

That said, there are a few things you can do to avoid an audit. And those same moves will help you get through one if your return happens to get picked.

1. Report all income

Hiding income from the IRS is unlikely to work out well for you. So gather up those 1099 forms and include that income on your taxes, whether it’s wages from a side hustle or interest your bank paid you. If you’re honest, says Steber, and you report everything, then the IRS may not have a reason to dig further.

2. Make sure you’re claiming the right deductions

You may be eager to take advantage of all of the tax benefits you can. But claiming a deduction you aren’t entitled to could increase your chances of ending up on the IRS audit list.

One tax deduction that lends to a lot of confusion, says Steber, is the home office deduction. He explains that this deduction is only available to tax-filers with self-employment income, so if you don’t have any, you can’t claim a home office. But if you claim a home office when you’re not supposed to, the IRS is likely to push back.

3. Have great documentation

If you’re self-employed, there are many different expenses you may be eligible to deduct on your tax return, from office supplies to travel costs to professional licenses. But if you’re going to claim a deduction for these things, make sure you have documentation to back your claim up.

Maybe you invested in a lot of business equipment this year and have claimed a $9,000 deduction. If you have receipts totaling $9,000, there’s really no issue.

To be clear, having documents won’t necessarily mean the IRS won’t look to audit your tax return. But in that case, says Steber, “If you’ve done your tax return accurately and you have good documentation, an audit is nothing more than someone asking to see some support.”

Don’t lose sleep over an audit

The idea of having a tax return audited may be daunting. But remember, in many cases, an audit is simply a way for the IRS to make sure your taxes are correct. And if they are, indeed, correct, there’s really nothing to worry about.

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