16 Sure-Fire Ways to Get Your Tax Return Audited
Commerce Clearing House has prepared a list of red flags that are likely to
trigger an audit of your tax return. If you want to avoid an audit, avoid
these items, according to the article which appeared in, among other places,
the Washington Post. On the other hand, if you want to call attention to
your tax return and make sure the IRS pays special notice to you above all
of the other returns they process, by all means, try some of these ideas!
The IRS will automatically disallow these items if they appear on your tax
return:
A loss on the sale of your house or personal property
Claiming a filing status of surviving-spouse for more than two years
Medical expense deduction for health-club dues, funeral expenses or diet
foods
Itemized deductions for sales taxes paid or import duties
Itemized deduction for personal interest, such as interest on credit cards
or auto loans
Itemized deduction for personal insurance, except medical and long-term care
insurance
Moving expense deduction in excess of legal limits
To stay buried comfortably inside the huge pile of 2000 tax returns, mind
the following:
When married filing separately, both spouses must itemize or both must take
the standard deduction. No mixing and matching.
Be careful to report the precise numbers listed on your W-2 wage statement
and 1099 statements of interest, mutual-fund gains, dividends, pensions,
etc. The IRS matches these numbers with the amounts that appear on your tax
return. Innocent discrepancies can trigger an audit.
If you received an incorrect W-2 or 1099, immediately ask the issuer to file
a corrected form, to avoid sending up a red flag.
Make sure the numbers on your tax return are consistent with those on the
return of any partnership or S corporation you are a part of.
If you have been audited before, don't repeat past mistakes. The IRS never
forgets!
If you sold a piece of investment property that you had depreciated, make
sure the gain or loss that you report this year reflects the costs and
write-offs you claimed in previous years.
If you claim unreimbursed employee expenses, keep proper records and make
sure you deduct meals and entertainment expenses correctly (usually only 50
percent is allowed as a deduction).
Make sure you deduct only the work portion of a car or computer that's also
used for pleasure.
If you own a business, know that the IRS is paying close attention to
companies that have few employees and many independent contractors for whom
the business pays no employment taxes.
AccountingWEB US 05 Mar 2001
Categories: News, Taxation
Story read 1570 times
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