Tips to avoid a tax auditPosted: Updated:
PHOENIX -- IRS audits are no doubt stressful for people. But if you make less than $200,000, your chances of being audited are only one in 100.
So, if you don't want to be part of that one percent, do your best not to raise any red flags.
Tax time can be stressful and for many Valley residents, preparing to file your taxes can also be time consuming.
"In the back of your mind you're always a little bit worried that, golly, what if they decide to audit me," one consumer we talked to said.
And when it comes to filing your taxes this year, the one thing you don't want to do is to trigger an audit by the Internal Revenue Service.
So, according to www.moneytalksnews.com you should always watch your charitable deductions. It's good to be a giving person, but be prepared to back them up with documentation just in case.
Watch who you hire. If a tax preparer is known for fudging numbers, the IRS may audit all clients, like you.
Be careful with the earned income credit. It's for low to moderate income families and led to $62 billion in refunds last year, but it is ripe for abuse.
Take your time. It sounds obvious, but making a simple mistake with your Social Security number could trigger an audit.
And finally, file electronically. According to the experts, your chances of getting an error noticed by the IRS is significantly reduced when you e-file. Plus, you get your refund a lot faster when you e-file.
"I think if you're honest when you're filing your taxes, you shouldn't have an issue." another consumer said.
Federal and state governments communicate, so if you get audited by one, you can expect to hear from the other, so make sure you can document everything.