Taxes For Dummies

Chapter 28

Ten Tips for Reducing Your Chances of Being Audited

IN THIS CHAPTER

Making smart moves to avoid an audit

Knowing that honesty is the best policy

If you’ve never been audited, you probably fall into one of these categories: You’re still young, you haven’t made gobs of money, or you’re just plain lucky. The fact is that many taxpayers are audited at some point or two during their adult lives. It’s just a matter of time and probability.

You can take some common-sense steps (honesty being the star of the show) to reduce your chances of having to face an audit. So here are our top tips for lessening your chances of being audited and avoiding all the time and associated costs of an audit.

Double-Check Your Return for Accuracy

Review your own return before you send it in. If the IRS finds mistakes through its increasingly sophisticated computer-checking, you’re more likely to be audited. They figure that if they find obvious errors, some not-so-obvious ones lurk beneath the surface.

Have you included all your income? Think about the different accounts you had during the tax year. Do you have interest and dividend statements for all your accounts? Finding these statements is easier if you’ve been keeping your financial records in one place. Recognize that increasing numbers ...