- Days left

IRS Audit Triggers: Six Red Flags

Audit letter from IRS
Cassandra Hubbart, DailyFinance
By Joy Taylor

Ever wonder why some tax returns are scrutinized by the Internal Revenue Service while most are ignored? The IRS audits only slightly more than 1 percent of all individual tax returns annually. The agency doesn't have enough personnel and resources to examine each and every tax return filed during a year. And its resources are shrinking ... the number of enforcement staff dropped nearly 6 percent last year, partly due to budget cuts. 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.

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

More from Kiplinger:

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

TurboTax Articles

Keeping Yourself Safe From Tax Scams Today

During tax time, there are numerous types of tax scams. These illegal schemes can result in the taxpayer being responsible for extra interest, penalties and possible criminal prosecution. Tax schemes and scams attempt to gain access to your financial information by email, telephone, fax or mail. They also may attempt to falsely collect tax you owe to the Internal Revenue Service. Using TurboTax ensures your financial information remains safe.

Health Care and Your Taxes: What's the Connection?

Your cost for Marketplace health insurance is based on the income you file on your tax return. Your reported income also determines your eligibility for the tax credits and penalties associated with Marketplace health coverage. Everyone has to have health insurance and by filing your taxes, you let the government know if you carry health insurance. The tax system acts as a way for the government to levy a penalty on those who don?t have it and to provide assistance, by means of a tax credit, to those who do.

Documents You Should Save for Tax Time

Settling your account with the Internal Revenue Service each year doesn?t need to be a frantic search for the information you need to file your tax return. Knowing what documents to have at your fingertips can help to reduce filing difficulties and possibly your tax bill.

Do The Math: Understanding Your Tax Refund

For most people, tax is collected by an employer at a rate that estimates your tax for the year. Your actual earnings and the deductions that you?re allowed to claim might cause you to pay too much tax, which leads the Internal Revenue Service to issue you a refund. "The idea behind a tax refund is quite simple," says James Windsor, a certified public accountant from Ann Arbor, Michigan. "When you pay more tax than you owe, the Internal Revenue Service returns the overpayment as your refund."

5 Tax Tips for Single Moms

If you?re a single mom filing your taxes, make use of tax credits and deductions that can help reduce your taxable income and reduce the amount of tax you pay. A number of strategies, credits and deductions can be used to reduce taxable income, and in some cases, allow tax refunds even if you didn?t pay in any taxes. When you use TurboTax, we?ll ask simple questions and handle these calculations for you.

Add a Comment

*0 / 3000 Character Maximum

1 Comment

Filter by:
scottee

if we had a small national sales tax that everyone pays...instead of the 73,000 pages of current tax code, we wouldn't need the IRS and all the tax games that people play.

March 19 2013 at 10:49 AM Report abuse +1 rate up rate down Reply
1 reply to scottee's comment
clarita995

but what about the states that have been and still ARE doing fine without any sales tax ? this is why it won't float.....and be realistic ONCE THEY START their taxes you know it always increases-

March 28 2013 at 11:16 AM Report abuse rate up rate down Reply