Here are twelve hot spots on your return that can raise the chances of scrutiny by the IRS.
- Making too much money- higher income filers = higher chance of an audit
- Failing to report all taxable income-IRS gets copies of all 1099s & W-2s
- Large charitable contributions-just be sure to keep all your documents
- Claiming home office deduction-use exclusively & regularly as your principal place of business.
- Claiming Rental Loss- Just keep a long of your hours because they agency will check.
- Deducting Business meals, travel, Entertainment- keep detailed records, IRS loves this one.
- Claiming 100% business use of a vehicle
- Large losses on Schedule C- hobby loss rule may apply
- Running a cash business- tempting target for IRS auditors
- Failing to report a foreign bank account can lead to penalties
- Engaging in currency transaction-If you are making large cash deposit be prepared for IRS scrutiny
- My favorite- Taking higher than average deductions- be sure have the proper documentation
There’s no reason to ever pay the IRS more tax than you actually owe. So just properly document all your items.