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Triggers For An Audit

The word audit alone has the ability to cause anyone a huge amount of stress. Many people that pay taxes have horrible dreams about being auditing, how and if they will be able to handle it. If you are one of those individuals that pays attention to the rules and you make sure that you report all of your income and their deductions, then you can be sure that even if you are audited that you will come out not having to pay the IRS because you did everything that you were required to do by law.

Here are lists of things that can trigger an audit when you are filing your return:

Make sure that you are claiming deductions that make sense. Heres an example, you have an old chair that is tattered and torn and you are donating this chair to some sort of charity and you are claiming a $600 deduction for this chair on your income tax return. You need to make sure that you have paperwork that coincides with this deduction and its amount. No matter what deduction that you claim (personal, business or charity), always make sure that you have the paperwork to back up the deduction.

If you have received money from your IRA or other plans early then you want to have whatever you need that proves you are exempt from having penalties. The early distribution should have qualifications that cause them to be exempt from taxes but if you find that they arent exempt then you need to report your early withdrawal on your taxes. More than half of those that receive an early distribution have no idea how to file this information on their tax returns. It is important that you know if this distribution is exempt or not so that you can either claim it as an exemption or pay the taxes on the money that was received.

Report all money that you have made. If you do not report all of the money that you have made; this could trigger an audit. If you have a business that you are doing part time and you make a little over a $1000 a month, you need to make sure that you report this income when you file your taxes. If you choose not to report the income and the IRS finds out about it, they will send you a bill that can go back for at least 7 years or whatever the amount of years are that you have had this extra income. For anyone that has a large income that they have not reported, they can also receive some criminal charges as well.