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Red Flags that could Trigger IRS Audits

on Tuesday, 24 February 2015. Posted in Doctor of Fitness

It’s Tax Season once again. Even if you’re an old hand at doing your own taxes, there are still plenty of mistakes taxpayers make that can generate unwanted attention from the IRS. Here are just a few:

  • Failing to report all of your income.  If you have the information about your income, so does the IRS. Employers are required to send copies of your W-2s and 1099s to the IRS. The IRS’s computers will match up all the social security numbers, along with the income, etc. 
  • Large meal, entertainment, and travel deductions.  If you have a W-2, the IRS will want to know about your employer’s reimbursement policy. Self-employed or not, if you claim these types of deductions, always document them thoroughly; dates and times, location, names of the people attending, the business purpose, and the nature of the meeting or discussion. 
  • Claiming 100% business use of a vehicle.  It’s important to keep detailed mileage records, listing the purpose for each trip as well. 
  • Not claiming any deductions for your business.  You should claim whatever deductions you are entitled to claim. Don’t be afraid to do anything on your return as long as you are being honest and have documentation to back up your claim.

Tax season doesn’t have to be the headache many people make it out to be. Keeping good records and making sure you have all the documentation needed, can go a long way toward making filing your taxes smooth and simple. 

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