The 6 Flags to Avoid In Order to Prevent a Los Angeles Tax Audit

No one wants to go through a Los Angeles tax audit. The audit is a long process that the IRS goes through when they think you owe more money than you paid. The audit process is hard to many people because they have to dig up receipts and other important paperwork from the past three years to prove the information they are presenting is correct. And since the IRS does not perform the tax audits without a firm belief in getting more money, it is likely you will have to write another check. There are some things that you can watch out for to avoid a Los Angeles tax audit. We will discuss these red flags below. Overestimating Your Donation

The IRS will encourage taxpayers to donate various things to charity in the form of a deduction for this donation. However, you are the one who will decide how much the items you donated are worth. Often taxpayers do not put down the amount that the item is worth. The IRS is not going to deduct $100 for a pair of jeans even if you spent that much on them. A good rule of thumb is to put down the price you would be able to sell the product.

Math Errors

Many times an audit is going to happen just from a simple math error. Make sure that all of the columns match up. Some people find that doing their returns online or with a tax professional can make the math mistakes occur less often.

Not Signing Your Return Many times the only issue is that you forgot to sign your tax return. Forgetting to sign the return will make the IRS check you out more than usual, which increases the chance you will be audited. The IRS is going to wonder what other information you may not have put on the return. Under-Reporting Your Income It might be tempting to not show all of your income on a tax return, but you must report everything you have received to the IRS. If you do not report this income, and the IRS catches you, you must pay back these taxes along with interest and penalties. In some cases, the IRS is not able to tell how much you make, but it is not worth the risk of the audit to not report income. Deductions for Home Offices While the IRS does allow some home office deductions, you need to be careful about what you are claiming. Large deductions or deductions for things you do not need can raise up a red flag. Also, if you are claiming a deduction that takes up a big percentage of your income, you are bringing on the ire from the IRS. Also, make sure that you are claiming things that help your business. You cannot claim a kitchen set as part of your business expenses when you are a writer. Income Thresholds When you start to make more than $100,000 every year, you will have a higher chance of being audited. There is nothing you will be able to do; it is just the system with the IRS. Just be careful to put in all of your information correctly when you make more than this threshold to help lower your chances of an audit. Worrying about an audit can be a trying experience. Hiring a tax professional to help you with your tax return can help to prevent an audit from occurring. If you are already dealing with an audit, having a tax professional on your side will help you get through the process as quickly as possible. For all of your Los Angeles tax audit questions and concerns, contact Tax Law Los Angeles. They will be able to answer all of your questions and get you set up with the right solutions for your needs. Contact them at https://www.taxlawlosangeles.com/.