5 Tips to Avoid IRS Audit

1. Honestly, honesty is the best policy
It might be common sense for some, but being completely truthful on your tax return is a necessity to reduce some of the stress and chances of being audited. You can do this by simply by reporting your income, deductions, and other figures correctly. Lying, especially if you have a larger than average income, or stowing away big amounts of cash. If you’re able to confidently bet your salary that you are being genuine, more than likely you’ve got nothing to worry about.
2. Electronic Filing
Electronic filing can be your best friend in today’s society. Why wouldn’t you embrace technology? By doing so, you can dramatically reduce the chances of you being audited. According to the IRS, the error rate for a paper return is 21 percent; meanwhile. The error rate for e-filing, is 0.5 percent.
3. Know if You are a Target
If you work in a cash business, such as being a waiter/waitress, bartender, or hairstylist you are already more likely to be a target for the IRS. Moreover, being a lawyer, doctor, or accountant who keeps his/her own books will result in a higher probability of being audited as well. Be sure to be extra meticulous with your deductions, and make sure you have receipts!
4. Hire an Accountant
While trusting a pro to get the job done might not 100 percent guarantee that you won’t be audited, it definitely reduces the odds of it happening. It never hurts to have a professional do the job, especially if your financial situation is complex or you own a business. A certified tax preparer can ensure that you get all the deductions entitled to you, and make sure that a complicated tax return is filed correctly.
5. Don’t mix personal and business deductions
The IRS is always on the lookout for small business owners who try to deduct travel expenses, entertainment and other various costs that are actually personal, not business related. Just understand the rules on what can and cannot be deducted.