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A TAXING DILEMMA: How To Protect Yourself From An Audit

The IRS estimates $340 billion goes uncollected or under-reported every year.

So an army of auditors works year round to reclaim that money.

But there are ways to make yourself more audit proof.

The IRS puts the majority of their resources on self reporting income returns.

If you are a wage earner who gets a W-2, you’re chances of being audited are greatly reduced.

“Audit resources in general go to where they’re needed,” according to Raphael Tulino, a media relations specialist for the Internal Revenue Service. ” Generally they’re needed more toward those who self report but that said, if something goes on the return that doesn’t quite jive with all the info that’s on it. For example, a large deduction in some spot that doesn’t quite work well with the income on it, then you might get a letter in the mail.”

Tulino says making a charitable contribution worth more than 50% of your income raises a red flag.

Of course, you can make a charitable contribution as large as you like, but be sure to keep all your receipts.

“There’s two rules you want to adhere to: you always want a paper trail. That way if you’re ever asked about it you can say, ‘Here Mr. IRS Auditor, here is my info,'” Tulino said. ” The second thing is you want to be giving to a qualified public charity.”

If you make more than $100,000 a year watch out.

The IRS is more likely to audit those returns than someone making less than six figures.

“As long as you’re putting info on your return that is legitimate and you can substantiate it, you are in good shape,” Tulino said.

Some e-filing programs, like Turbo Tax, have an audit guide to calculate your risk of being audited.

A few simple tips to keep you out of tax trouble.

KESQ News Team

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