Tax Tips To Avoid An Audit - Boston News, Weather, Sports | FOX 25 | MyFoxBoston

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>>

  • 1 Female Employee Dead, 2 Wounded In Shooting At Darby Wellness Center

    1 Female Employee Dead, 2 Wounded In Shooting At Darby Wellness Center

    Thursday, July 24 2014 5:25 PM EDT2014-07-24 21:25:25 GMT
    We are following breaking news in Darby, Pa. where one female employee is dead and two are wounded in a shooting at the wellness center on the Mercy Fitzgerald Hospital campus.
    We are following breaking news in Darby, Pa. where one female employee is dead and two are wounded in a shooting at the wellness center on the Mercy Fitzgerald Hospital campus.

  • GREAT FRIDAY AHEAD

    Thursday, July 24 2014 4:22 PM EDT2014-07-24 20:22:00 GMT

    Friday: H-85 L-64

    We stay dry Friday with a comfy morning with lows in the upper 50s to low/mid 60s. Expect low humidity and sunny skies. High of 85. We warm back up near 90 for the weekend with a few pop up storms on Saturday and better chances on Sunday.

    Friday: H-85 L-64

    This Weekend

    Saturday: H-87 L-65

    Sunday: H-89 L-73

  • Arrest Made In Fatal Camden Hit And Run

    Arrest Made In Fatal Camden Hit And Run

    Thursday, July 24 2014 11:45 AM EDT2014-07-24 15:45:20 GMT
    Surveillance Footage: Camden County Police DepartmentSurveillance Footage: Camden County Police Department

    According to the Camden County Prosecutor's Office Facebook page an arrest has been made in the fatal hit and Run that took place Saturday night.

    According to the Camden County Prosecutor's Office Facebook page an arrest has been made in the fatal hit and Run that took place Saturday night.

Powered by WorldNow

25 FOX Drive
Dedham, MA 02026

Phone (781) 467-2525

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