One of the most dreaded tax-related happenings is an audit.
No one wants to go through the hassle and stress of being audited by the IRS. The good news, though, is that there are many things that
you can do to greatly reduce your chances of an audit. And, while none of these strategies are completely
foolproof, they can greatly reduce the possibility that you will face an audit.
Consider
Incorporating
While, in some cases, who gets audited is just “random” or
“luck of the draw,” there definitely are some groups of people who are more
likely to be audited than others. This includes the self-employed, especially if you choose to
file a Schedule C. While there isn’t anything inherently wrong with a schedule
C, you can greatly reduce the possibility of an audit by choosing to either
incorporate or form a limited liability company. If you’re unsure how to do this, any tax professional can
assist you; it is a surprisingly simple process that can end up saving you a
lot of hassle.
Check and
Double-Check Your Returns
One of the easiest ways to find yourself getting audited is
if you make errors on your tax returns.
Even if you correct them later, having any errors at all
makes the IRS wonder where else you may have made mistakes, thereby increasing
your chances of an audit. Your best bet is to either check and double-check your
returns, including and especially all of your math, or, better yet, to have a
professional prepare your returns or at least go over them for you.
Be Honest
Finally, as simple as it may seem, make sure you’re being
100% honest on your returns.
The IRS is very good at sniffing out those people who aren’t
telling the full truth. Besides the possibility of an audit, there is no real reason
to risk being dishonest and the consequences that can come if you’re found out. There are far too many legitimate, legal ways to save money
without resorting to dishonesty. You can learn about real ways to save by
getting help from a tax professional.