Consult your tax expert before following any advice your find online. IRS tax help is available at a number of professional sites and you can also find irs tax help at, can you believe it, the IRS' own web site. If I needed IRS audit help I think I'd talk to a good tax attorney.
We all love taxes, right?
Take a look at the numbers, we pay upwards of 50% of our income to one or another taxing authority. Obviously this is one of the reasons that tax reduction is such a big business. Some people will argue that the income tax is illegal since
certain formalities weren't followed. Well, good luck to them. Formalities or not taxes are the law of the land and if you don't play by the rules you might need to know about...
IRS Audits and the Percentages
For most Americans, the mere suggestion of an IRS audit is enough to require the changing of the pants. So, what percent chance do you have of an IRS audit?
Relax; the percentages of IRS picking you for audit are very small if you have filed your taxes honestly and properly. The IRS gets a couple hundred million tax returns filed every year. It does not have the necessary staff to audit each and every tax return. In fact, the IRS audits less than 2 percent of tax filers. So theoretically, the possibility of you getting audited by the IRS is very low unless you attract their attention by committing a few mistakes.
One area where you can hurt your possibility of an IRS audit is underreporting income. For zeroing in on possible undisclosed taxable income, the IRS has devised certain criteria. The IRS has computer software that separates the suspect filers from the clean ones. It also filters out filers who have claimed an excess of deductions, have shown losses for successive years and show expenses disproportionate to the size of their business.
[ You can get IRS help from the IRS' own site, http://www.irs.gov/. It has extensive FAQs, forms, etc. For IRS audit help you should see your tax attorney. If you wind up owing any IRS back taxes then that attorney might be a big help, depending on your own situation. -Ed]
If you earn $50,000 and show $10,000 as charitable deductions, your possibility of an IRS audit go up massively. The software will compare your deduction with others in your income group and will find that it is rare that anyone in that income range ever makes such donations. A red flag will be assigned to your file and it is audit time. If you actually have $10,000 in charitable deductions, however, this should not stop you from claiming them. You need to simply make sure that you have all the necessary documents to support your claim of making a donation in that amount.
More than employees, self-employed people are targets of audits as they have the ability to convert personal expenses in to business ones and put it under itemized deductions. Your car mileage and expenses on meals and entertainment must have detailed information backup. The use of a car or truck should have detailed logs and invoices of maintenance. Meals above $75 should have bills and for amounts below that, a simple entry in the diary with details of date, place and name of restaurant and kind of entertainment they provide, person entertained and your relationship to them will suffice.
An IRS auditing is inescapable when they are discrepancies or questionable activities on forms you file. Nevertheless, remember, these items must be deemed odd by the computer sorting out filing papers of every American. As a result, the possibility of you being audited is very small.
Saving money on taxes is one of the easiest ways of increasing your standard of living. Here are some favorite tax tips:
- For the best tips, and income tax return help, it might just be worth your while to talk to a tax expert.
- Always keep complete documentation on both expenses and income. Don't wait till the last minute to gather up those records.
- Save as much as allowed in retirement accounts - this is the easiest tax deduction. Talk to your retirement account expert first.
- Education is the key (Ernst & Young's Tax tips listed below is excellent)
- You can deduct tax preparation fees or tax preparation software. I like TurboTax, but there are others.
- Start a home based business. As an employee you get three tax deductions (dependents, mortgage, charity,) but with a home-based business you get many more. This will save you a bunch per month, depending on your own situation. Click here to see what CBS Marketwatch has to say about home based businesses. Talk to a tex expert before taking any of those deductions, there are a few traps.
- Here's a report by a fellow who trains IRS tax attorneys. He talks about the benfits of a home-based business.
- Here's a 5 minute flash movie which will tell you about the home based business I participate in.
Here are some other great places to get income tax help:
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