Don’t Fear IRS Audits – Pt 2

Do you fear an IRS audit?

Besides the headache of filing annually, many people worry about getting audited, but experts believe the IRS concentrates its efforts in collecting the big money. When AI detects mismatched information, audits can be triggered. They also occur through random selection or being connected to someone who’s being audited. Reporting income below $25,000 or above $500,000 are also triggers.

Kiplinger made a list of things that can increase the risk of being audited. Here are a few they mentioned: Be concerned if you fail to report all taxable income, make a lot of money, don’t file, or claim higher-than-average deductions, losses, or credits. Same with failing to report foreign bank accounts. Taking large charitable deductions in comparison to income can also be a trigger. Now, if you run a business and file Schedule C or write off what sounds like a hobby loss using Schedule C, you might become a candidate. Failing to report certain professional earnings as self-employment income is also a red flag. Same with taking an alimony deduction or claiming the foreign earned income exclusion. Beware if you fail to report gambling winnings or claim big losses. Operating a marijuana business might also get you flagged. Taking the research and development (R&D) credit or engaging in virtual currency or other digital asset transactions can also be a trigger. Accuracy and honesty reduce the risk while giving you a clear conscience. For more audit information, check the IRS website.

Now, besides audits, are you worried about credit card debt? Christian Credit Counselors are the best. They’ll create a debt management plan specifically for you. For more information, visit crown.org/ccc.