It's a myth. If your return is straight forward, that is a W-2 for income, 1099's for other income, mortgage interest, property taxes, and other itemized deductions that fall into the normal ranges (only IRS knows what these normal figures really are, however some sources have figured out a reasonable estimate of what they might be), then you have barely a trace of a chance to be audited. IRS wants to go after the folks who are self employed, take large deductions for travel, entertainment, & mileage and who may not have accurate records to substantiate those deductions. This is where the greatest risk of audit lies. That's not to discourage people from filing as self employed enterpreneurs. It just means keep good records.Another area of concern is if you take large charitable contributions without documentation. Or gambling losses. Almost everyone who claims a sizeable casualty loss is guaranteed an audit. The bottom line is if you are going to take a deduction, make sure you understand what is deductable and what are acceptable accounting records in case you are ever audited. My last 6 audits of tax returns I prepared for clients were no change audits. That means just because you're audited, doesn't mean you'll automatically be charged additional tax.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ra