There has been a common trend in the financial sector where individual bank accounts, assets, and also houses are being taken by IRS. This is done to compensate for tax arrears after an audit. The good news is that there are certain things you can do to prevent an IRS audit. Read on to find out what they are.
1. Keep Up with Your Accounts
One of the best ways to prevent a tax audit is by checking your calculations thoroughly. This is needed before filing your returns and paying your taxes annually. It is important to use a calculator when balancing your accounts to avoid errors. It is also suitable to counter check the source documents to ensure the calculations are correct.
When you are not certain what you can and cannot claim in the deductions, ask a tax expert. Their specialized knowledge and expertise in that field will come in handy during this process. Your record will be clean and you will reduce your chances of an IRS audit.
2. Keep Proper Records
Another key element to avoid having an IRS audit is to keep the right records. This makes it easy to file them and also saves time since the records are well kept. When questioned about an audit, there will be proof to defend your statements and calculations. Being honest is an integral part of your tax return. Having malicious activities and not reporting your earnings can get you in serious trouble with the IRS. If found guilty, you may end up in jail, which will subsequently jeopardize your personal and professional life.
3. Go Digital
Filing your taxes electronically is another measure you can take to reduce your chances of an IRS audit. It is estimated that the error level for electronic returns is extremely low as compared to that of paper returns. Furthermore, the IRS audits about 1% of the whole population, meaning that filing electronically puts you in a much safer position.
If you are worried about your tax returns, consulting an experienced attorney can go a long way toward clearing things up. Tanika L. Finney is a locally based and highly trained attorney who can help you sort through the mess and put your mind at ease. Call now at 334-246-4170.