There are a number of indicators on a tax return that can trigger an audit. One of the best reasons to use CPAs to do your taxes is that they are aware of most of these. No one wants to be audited. In 2016 only.7% of individual and .8% of small business returns were audited. These are small percentages so most of us do not get audited. The chances of being audited for those who make $1,000,000 or more a year range from 2.06% to 18.7%.
A few things auditors look for in tax return are mathematical mistakes, charitable gift amounts that are based on purchase price rather than current value, non-qualifying home office deductions and driving-related costs.
You might be surprised at some of the legitimate deductions you can take but knowing about them is necessary to take advantage.
How can you determine what deductions are allowed? You can read the tax code for 2017 which is reported to be between 2,600 and 70,000 pages (depending on what is included in the count) OR you can use a CPA to prepare your taxes. Your preparer should make it his business to keep up with the current tax codes and changes.
If you have not yet started preparing your return, give Les Merritt, CPA, a call at (919) 269-8553 to make an appointment. Since it is getting close to the deadline, you may have to file for an extension, but feeling secure that your taxes have been prepared correctly should make you more comfortable. Avoiding the red flags for an audit could make your life easy after you have filed.
Be sure to contact Les Merritt and get your taxes done claiming all the legitimate deductions and no more. The audit you save may be your own.