5 things that may trigger an audit

February 8, 2007 at 3:30 pm Leave a comment

According to CNNMoney.com, there are five things the IRS looks for in tax returns. Here’s the break down.

1. Earning too much money
The higher your income, the more the IRS becomes interested in you. In the 2006, the number of audits for incomes of $100,000 or more rose 18%.

2. Giving too much to charity
Because of recent abuse of charitable giving, contributions exceeding 5 to 10% of income can raise some questions. Be sure to have documentation on all of your giving, financial or not.

3. Know whether the alternative minimum tax applies to you
If you are a high income earner in a high tax state, you might be an AMT. Be sure to check with your accountant to avoid a visit from the tax man.

4. Too many credits
It is common to make mistakes with earned income credits, i.e. credits for education, seniors and earned income. This usually applies to the lower income earners. A Volunteer Income Tax Assistance Program is available for low to moderate income filers who can’t prepare their taxes.

5. Careless errors
Any mistake on your tax return can trigger an audit. Wrong social security numbers, math errors, or simple mispellings.

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Entry filed under: Taxes.

What a day…month actually.. You might be paying through the nose in taxes…

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