How to Protect Yourself Against IRS AuditsAuthor: William Bevins, CFP® CTFA | May 31, 2021 | 0 Comments | 25 View(s)
Spending time working on your taxes can be a scrutinizing task, especially if you’re a business owner or sole proprietor. Regardless of how meticulously you file, there’s always a chance that you’ll be audited by the Internal Revenue Service. In fact, roughly 1 in every 220 individuals were audited in 2020. While this number is lower than previous years, your risk for an IRS audit is never zero. Your risk increases when you make over $200,000 and this risk continues to increase the more you earn. To take a proactive approach to taxes, here’s how to protect yourself against IRS audits.
IRS Audit Red Flags to Recognize
The first step in protecting yourself against IRS audits is understanding some of the common red flags. While there is no way to make sure you are 100% safe from an IRS audit, taking the proper precautions and keeping adequate records will help you avoid mistakes. Some common red flags that can raise attention include the following.
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