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Don't Get Audited! The IRS's Dirty Dozen Red Flags

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Audit By Joy Taylor, assistant editor, The Kiplinger Tax Letter

Ever wonder why some tax returns get intense scrutiny from the Internal Revenue Service while most are ignored? The agency doesn't have enough personnel and resources to examine each and every tax return filed during a year -- it audits only slightly more than 1% of all individual returns annually.

So the odds are pretty low that your return will be picked for review. And, of course, the only reason filers should worry about an audit is if they are fudging on their taxes. But even if you have nothing to hide, an audit is no picnic.

Here are 12 red flags that could increase your chances of drawing some unwanted attention:





Read more: http://www.kiplinger.com/slideshow/tax_audit_redflags/13.html#ixzz1kgDBQ7GI
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What Are the Tax Penalties for Smokers?

Starting in 2014, the Individual Shared Responsibility provision of the Affordable Care Act made you responsible for having minimum essential coverage, or MEC, in health insurance. Otherwise, you need to be eligible for a health care exemption, or you could pay a penalty when filing your income tax return. This requirement for minimum essential coverage applies to smokers and nonsmokers alike. If you're not covered by an employer's health plan and are a smoker, you can go to the health care marketplace to find MEC. If you're still unable to comply, you may have a penalty applied.

5 Steps to Navigate the Healthcare Marketplaces

To navigate the Health Insurance Marketplace, you have to know what you want from a health plan. Have your previous plan handy to make comparisons, as well as household and income information. If this is your first health plan, be aware of your needs and know your tax situation. Eligibility depends on the size of your family and combined income from all sources.

What Is Form 8941: Credit for Small Employer Health Insurance Premiums

Small business owners who subsidize the cost of employee health insurance premiums may be able to get some of that money back by claiming the credit for small employer health insurance premiums on their taxes. Some of the eligibility requirements, however, limit the number of people a business can employ and the average annual wages they earn. Qualifying as a small employer can reduce your tax bill by the amount of the credit you report on Form 8941.

What Is Form 8911: Alternative Fuel Vehicle Refueling Property Credit

In light of rising gasoline prices and environmental concerns, consumers have become more receptive to buying cars and trucks that run on types of fuel other than gasoline. The U.S. government introduced a tax incentive to encourage the installation of facilities to store or dispense alternative fuels in 1992. That incentive has evolved into a tax credit that also applies to equipment that recharges electric cars. If you equipped your home or business to accommodate alternative fuel vehicles, you may be able to use Form 8911: Alternative Fuel Vehicle Refueling Property Credit to reduce your federal tax obligation.

What Is Form 8885: Health Coverage Tax Credit

The health coverage tax credit is a program in place for tax years from 2002 to 2013 to help eligible individuals and families by paying a portion of premiums for qualified health insurance programs. Since the legislation authorizing the credit expired in January 2014, tax returns filed in 2014 for the 2013 tax year represent the last time eligible taxpayers can claim the credit.

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LiberalsRUglyAmerica

Everyone should bill the IRS $25 per hour for the time spent on providing tax returns as that makes you a temporary employee/agent of the IRS.

April 12 2012 at 1:33 PM Report abuse rate up rate down Reply
SomebodySmart

The best way to make sure nobody gets audited is to elect Ron Paul, who will repeal the federal income tax.

February 28 2012 at 6:42 PM Report abuse rate up rate down Reply
izraulhidashi

I.R.S = Individually Raped and Sodomized

February 07 2012 at 3:08 AM Report abuse rate up rate down Reply
Rita

there will NEVER!!!!!!!!!!!!! be a flat tax. you no how many irs workers would be out of a job.

February 05 2012 at 11:48 PM Report abuse rate up rate down Reply
1 reply to Rita's comment
Dale

The complicated part of doing taxes is NOT figuring out your tax rate. The complicated part is figuring out your income. A flat tax rate would not save time it would just legitimize unfair taxes on the poor. It's a really stupid idea and it wouldn't put any IRS workers out of work.

March 30 2012 at 9:03 PM Report abuse rate up rate down Reply
Cara

uh reading articles like this???duh...

February 05 2012 at 8:20 PM Report abuse rate up rate down Reply
Rick

dont pay your taxes and see what happens! U b ib jail!

February 04 2012 at 3:03 PM Report abuse rate up rate down Reply
sarwark

I think, income tax should be free of all loopholes.A flat rate of income tax for all earnings whether wages or investments should be intoduced. All senior citizens (65 and above) should exempted from all kinds of taxing including ss income and others. The roll of IRS should be adjusted to tax witholding area only based on flat tax rate. Tax return activities should be completely stopped.

February 04 2012 at 3:02 PM Report abuse rate up rate down Reply
Jodie

Abolish the Income Tax. I think the IRS should be abolished period - it's really sad that it is not federal law - the income tax has no basis, but politicians and corporate america can steel from you but you can't refuse to give them. This is a bit lopsided and they have the world hooked up so you have to have direct deposit, giving them first and giving you and your family the left overs. So, if this is not a law why doesn't some political stooge do something about it? Get rid of the tax period and all politicians should serve 4 to 8 years salary based on that of federal employees pay scale.

February 04 2012 at 1:53 PM Report abuse rate up rate down Reply
1 reply to Jodie's comment
Dale

It's actually settled law. I believe it actually went to the Supreme Court and was upheld and I'm glad it was. I'm cheap but I'm not stupid.

March 30 2012 at 9:03 PM Report abuse rate up rate down Reply
Greg

The IRS.. Infernal Revenue dis-Service. Buckingham you are correct. IRS is an Federalized agency constructed in Fraud. Their ' code' is further complicated by ' words of art' under the ' Color of Law'...Looks like law, acts like law..but IS only the ' color of law' Code never supercedes the law. IRS code is cross referenced with US Code and FRCP ( Federal Rules of Civil Procedure). The Income tax is VOLUNATARY to most Americans residing in the states.
Didn't know that? No one ever told you?..Never saw it in print ? Look again. Supreme Court stated it in case law many years ago..quote -" Our tax system is based upon VOLUNTARY ASSESSMENT & PAYMENT, NOT upon DISTRAINT." Flora v U.S., 362 U.S. , Helvering v Mitchell, 303 IS.., Treasury REGULATIONS on Procedural Rules ( 1954 code) s/s 601.103 (a). // 26 CFR s/s 601.602 (a) . See - Gregory v Helvering.
As for the 16 th Amend. 'There is no enabling clause [.] See- Peck v Lowe, 247 US 165. // Stanton v Baltic Mining Co., 240 U.S. 103 // Eisner v Macomber 252 U.S. 189, at 205 and ' For the Record'.. ie. 1979 H.Zaritsky, legislative atty. for Congressional Research Svc. Library of Congress, as per request of Congress, determined " the 16th Amend. had NO Legal effect ." There's much more. Learn.

February 04 2012 at 1:38 PM Report abuse rate up rate down Reply
Buckingham's

Don't steal from the government. The IRS hates competition.

February 04 2012 at 12:03 PM Report abuse rate up rate down Reply