How To Avoid An Audit
-Check your figures. Math mistakes are easily found and raise eyebrows
-Don't under report income. Remember your W2 and other incomes are also reported to the IRS separately and compared
-Keep it simple. If you file Form 1040-EZ, pay rent, don't have children and make a modest income, there is virtually no chance you will be audited unless something's really out of whack.
-File electronically. The error rate for a paper return, the IRS reported, is 21 percent. The rate for returns filed electronically is 0.5 percent.
-Taking Large Charitable Deductions. The IRS knows what's normal for your income level.
-Claiming Rental Losses. There are specific rules for investors, passive losses and those in the business. Be careful
-Deducting Business Meals, Travel and Entertainment. Watch out it is the number one place for fraud.
-Claiming 100% Business Use of a Vehicle. An eye opener, particularly if it's your only car. Some people inappropriately take extra expenses on top of the 'standard mileage deduction.'
-Writing off a Loss for a Hobby Activity. You must report any income you earn from a hobby, and you can deduct expenses up to the level of that income. But the law bans writing off losses from a hobby.
-Claiming the Home Office Deduction. Beginning with 2013 returns, you have a simplified option for claiming this deduction. The write-off can be based on a standard rate of $5 per square foot of space used for business, with a maximum deduction of $1,500. The IRS is watching this.
-Running a Small Business. Small business owners in cash-intensive businesses (taxis, car washes, bars, hair salons, restaurants and the like) are a tempting target for IRS auditors.
-Failing to Report a Foreign Bank Account. The IRS is intensely interested in people with money stashed outside the U.S., especially those in tax havens.
-Engaging in Currency Transactions . If you make large cash purchases or deposits, be prepared for IRS scrutiny.
If you do get selected for an audit, don't forget about Form 911. It's used to request help from the Taxpayer Advocate Service. The number might seem like a joke, but the service is an independent department of the IRS that helps people who can't afford professional representation.
We stay unsettled through the first half of Saturday. Cooler air moves in late weekend with a nice stretch of weather beginning Sunday.
There may be some showers around tonight as we stay mostly cloudy and humid. Clouds hang on Saturday with some early rain but it'll turn much cooler and less humid throughout the day. High temperatures will only be in the low to mid 70s.
The sun returns for the second half of the weekend with a breezy and nice Sunday. Temperatures slowly warm next week as we enjoy days of sunshine and pleasant late summer weather.
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