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Two weeks from today, on April 15, the Internal Revenue Service will want its money.<\/p>\n
Tax day is a stressful, frustrating day<\/a> for most people, but that doesn\u2019t hold a candle to those who are notified a little further down the line that their tax return has been selected for an IRS audit.<\/p>\n Here\u2019s the good news: Audits are rare. The IRS audit rate dropped to just 0.38% of all returns in 2022. And the most common causes of an audit can be avoided if you take your time while assembling your return\u2014even if that means you need to file for an extension<\/a>.<\/p>\n Make sure you have all of your forms, especially your 1099 if you\u2019re working a side gig.<\/p>\n And, as obvious as it sounds, don\u2019t artificially inflate your deductions. The IRS will compare the deductions you take in comparison to those of taxpayers who have a similar profile as you. If they\u2019re out of range, that could increase your chances of getting a note.<\/p>\n (Most audits are done via correspondence, though rarer in-person audits do still occur.)<\/p>\n You\u2019ll also want to avoid simple mistakes that could result in the IRS flagging your return. Here are the most common ones, according to the IRS.<\/a><\/p>\n Filing too early<\/strong>. This goes back to the don\u2019t rush mantra. Wait until you\u2019re certain you\u2019ve received all your tax reporting documents before you file.<\/p>\n Missing or inaccurate Social Security numbers<\/strong>. Double check these to avoid a headache.<\/p>\n Misspelled names<\/strong>. If the named don\u2019t exactly match the information on your Social Security card, it could trigger an audit.<\/p>\n Inaccurate information<\/strong>. Be especially careful when writing the amounts of wages, dividends, bank interest, and other income.<\/p>\n Incorrect filing status<\/strong>. Don\u2019t check \u201chead of household\u201d if you\u2019re not. Not sure if you qualify for a status? Check with an accountant.<\/p>\n Math mistakes<\/strong>. Simple addition and subtraction can be less simple for some people. Always double check your math, or (even better) use tax-preparation software to do so.<\/p>\n Figuring credits or deductions<\/strong>. Figuring things like earned income tax credit, child and dependent care credit, and child tax credit can get confusing. This is another case where tax software can help.<\/p>\n Incorrect bank account numbers<\/strong>. Double check both the routing and account numbers.<\/p>\n Unsigned forms<\/strong>. If you don\u2019t sign the return, it\u2019s not valid. That goes for your spouse, too, in most cases.<\/p>\n Disreputable tax preparers<\/strong>. Don\u2019t rely on someone who\u2019s not a true tax professional. The IRS can help you find someone to prepare your tax return.<\/p>\n<\/div>\nSubscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up<\/a> for free.<\/div>\n