“Tax audit,” term is enough to enlighten your frightening senses. No one wants to get trapped in the IRS audit however, still every year several people receive notice for audit. Although the number of taxpayers selected for audit is a fraction of the total number of taxpayers. If you’re among few lucky people who have received the audit notice, you must have made errors or forgot to attach necessary documents. Therefore, you should be extra conscious while preparing and planning your tax. No matter what grades you got in mathematics when you were in school. But while preparing tax, you should not only check the calculation but also recheck everything when you are done with it.
Main reason for getting audit notice is the mathematical mistakes in your tax return. Besides mathematical errors, most of the taxpayers also make mistakes in computing their deductions and exemptions. The reason why we make such silly mistakes is that we are not aware of our tax rights. Moreover, we don’t keep ourselves up to date with the changes or amendments that are being made in the tax laws. If you don’t want to show up in the list of taxpayers that are being audited by the IRS, go through the tax laws and your rights as a taxpayer. Are you taking IRS for granted and thinking that IRS agents will ignore your errors as millions of other taxpayers are also there? If yes, you are slightly incorrect as IRS’ computers are well versed in correcting the mathematical errors automatically. If you’ve availed some deduction using a particular tax relief option however, IRS systems found that the deduction has exceeded the tax code then you could be one of the prime candidates for the audit.
Apart for calculations, records of your expenses are also very important for your tax and preparation and filing. If you’re spending more that $75 on your traveling, meals and automobiles, keeping their bills safely should be your first priority. In case, you have deducted $100 from your tax amount as you’ve bought an air ticket for $100 however, you don’t have a slip to back it up; you’re not going to get any deduction. You should adopt an organized system to keep all the receipts with expenses of more than $75. You must have heard several times that you should file your taxes as late as you can. It is correct but you should know what the last date is so that you don’t miss out on filing return in time. If you’re filing taxes at the last minute, chances are very less that you’d be picked by the IRS for audit.
You should not be lethargic in rechecking your deductions and taxes. It allows you to correct the errors, if there are any. If you are clueless in tax preparation, you should hire a tax professional and enjoy worry free tax filing.