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

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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Cities with the Lowest Tax Rates

The total amount of tax you pay reaches far beyond what you owe the federal government. Depending on where you live, most likely you're required to pay additional taxes, including property and sales tax. The disparity between the amount of tax you pay in a low-tax city and that in a high-tax city can be dramatic. Living in any of these 10 cities could save you a bundle, although the exact amount may fluctuate based on your income and lifestyle choices.

Cities with the Highest Tax Rates

Much ado is made in the press about federal tax brackets, but cities can carry a tax bite of their own. Even if you live in a state that has no income tax, your city may levy a variety of taxes that could eat away the entire benefit of living in an income tax-free state, including property taxes, sales taxes and auto taxes. Consider all the costs before you move to one of these cities, and understand that rates may change based on your family's income level.

Great Ways to Get Charitable Tax Deductions

Generally, when you give money to a charity, you can use the amount of that donation as a deduction on your tax return. However, not all charities qualify as tax-deductible organizations. While there are many types of charities, they must all meet certain criteria to be classified by the IRS as tax-deductible organizations. There are legitimate tax-deductible organizations in many popular categories, such as those listed below.

A Freelancer's Guide to Taxes

Freelancing certainly has its benefits, but it can result in a few complications come tax time. The Internal Revenue Service considers freelancers to be self-employed, so if you earn income as a freelancer you must file your taxes as a business owner. While you can take additional deductions if you are self-employed, you'll also face additional taxes in the form of the self-employment tax. Here are things to consider as a freelancer when filing your taxes.

Tax Deductions for Voluntary Interest Payments on Student Loans

Most taxpayers who pay interest on student loans can take a tax deduction for the expense ? and you can do this regardless of whether you itemize tax deductions on your return. The rules for claiming the deduction are the same whether the interest payments were required or voluntary.

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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

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

I.R.S = Individually Raped and Sodomized

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

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

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

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

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

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

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

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

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

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

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

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