What’s this? A letter from the IRS?
“What could they possibly want? I did my income taxes, and everything was in order!”
Well, it turns out that the IRS feels differently, and they have questions for you.
Welcome to being audited! Uncle Sam now wants to know everything about everything you’ve done financially.
Luckily, audits are rare, but if you get caught in one, you will be under a lot of pressure to quantify what you claimed on your last return.
So, how can you avoid winding up under the looking glass?
Note: these are not guaranteed methods to keep you off the radar, but they might help.
First and foremost, be as accurate as possible in reporting. Rounded numbers can appear suspicious, so avoid the urge to make it look neater and stick to the real numbers. Your reported income also must match the income reported by the banks.
Ensure you don’t report tax credits and deductions that don’t make sense for your income. If you made $100,000 and claimed $70,000 in deductions (charity or business), this is a red flag for them.
It’s always a good idea to keep tax documents for seven years, per the IRS. After that, getting questioned about something so far back is unlikely.
We all hope we never get audited – not because we have something to hide. Being watched so closely can be very uncomfortable and stressful, and it’s a lot of legwork to prove your case when the tax man comes knocking.
A dedicated financial advisor can help get you through an audit or maybe even prevent one. We can help you ensure all of your paperwork’s in order and accurate.
Want to talk about getting me on your team? Call 330 836 7800 Ext. 1or book a spot on my calendar here for a free consultation!
