March 8, 2025 - 18:07
As tax season approaches, it's crucial to be aware of potential pitfalls that could attract the scrutiny of the IRS. According to tax professionals, certain mistakes can significantly increase the likelihood of an audit. Here are some common red flags to watch out for.
Firstly, discrepancies between reported income and what your employers or clients have reported can raise alarms. Ensure that all your income sources are accurately documented and match the figures reported to the IRS. Secondly, claiming large deductions that seem disproportionate to your income can also trigger an audit. It's essential to keep thorough records and only claim deductions that you can substantiate.
Another common issue is failing to report foreign bank accounts or assets. The IRS has stringent reporting requirements for overseas accounts, and neglecting these can lead to severe penalties. Lastly, if you run a business, be cautious with your expense claims. Excessive or unusual business expenses can draw attention and warrant further investigation.
By being mindful of these common mistakes, taxpayers can navigate the season with greater confidence and minimize the risk of an audit.
