What Can Cause a Tax Audit?
If not at random, there are numerous reasons why your taxes might be flagged for an audit. And by having a tax prep pro work with you, you significantly reduce your chances of interacting with the IRS. Here’s what needs to be avoided when filing your taxes:
- Late Filings
- By filing your taxes past the set due date, you immediately open yourself to scrutiny by the IRS. And while there’s debate about whether you should submit a potentially incomplete tax filing on time or a complete filing late, every accountant will agree you must pay something to the IRS by the due date. At the very least, you paying some amount towards your taxes shows the IRS you are making a good-faith effort.
- Numerous Mistakes
- If your tax filing has become more complicated this year, consider having a professional help you prepare. Otherwise, you risk making unintended mistakes. And the IRS will undoubtedly notice any errors made to your filing. Best case scenario, they only ask you for an amended return. Worst case scenario, mistakes made on your tax filing triggers an audit.
- Drastic or Inconsistent Changes
- Sometimes an audit is out of your control if your income status and tax filing have changed drastically from year to year. The IRS expects some changes to occur, but the more significant the change, the more likely they are to investigate it. Otherwise, odd occurrences or inconsistencies can cause an audit. For example, if your business continually loses money year after year. While you cannot prevent audits borne from these scenarios, you can be prepared by holding on to all records of income, deductions, etc.
If you do end up with a tax audit in Peoria IL, there’s no need to fret. The team at Martin Hood can help you organize your finances and submit what is needed for the IRS to accept your tax filings. And if you need continued financial guidance beyond tax preparation, we can assist with that too. Our team provides essential financial services for you or your business, including:
- Entity Formation and Structuring
- Accounting System Set-Up
- Estate and Gift Planning
- Payroll and Sales Tax Processing
- Monthly Bookkeeping Services
- Employee Benefit Plan Audits
- And More