Tax Audits are on the Rise

With just two days to go before the tax filing deadline, keep in mind that audits have been on the rise in recent years. In fact, according to an article from H&R Block’s Tax Advice Central, American have a 1 in 107 chance of being audited, and the likelihood jumps to 1 in 63 if you make over $100k. According to the article, the two most common mistakes that result in closer IRS scrutiny are: (1) failure to sign your return, and (2) inclusion of incorrect social security numbers. The article goes on to say that the most likely audit red flags are unreported income, itemized dedcuctions, casualty losses, and hobby losses. (see also my earlier article on audit red flags). If you’d like to avoid an audit, or at leas survive the process, Block recommends learning the rules about what has to be reported, keeping up with what is and isn’t deductible, and keeping meticulous records. If all else fails, be sure to check out my article on tips for fighting an audit.