Dealing with the Internal Revenue Service is rarely fun. The same is thought to be true for audits that the IRS demands from individual taxpayers. While it’s true that nobody in their right mind thinks that responding to an audit request is fun, it’s not as difficult as most people make it out to be. You likely won’t need tax audit representation in Anaheim unless you earn a lot of money or have a very sticky tax return situation.
The More Money You Make, the More Likely an Audit Is
In general, the higher your adjusted gross income is, the more likely you are to be called upon for an audit by the Internal Revenue Service. In 2018, the likelihood of being audited if your adjusted gross income was zero was 2.04 percent. This chance dropped all the way to the $100,000 to $200,000 bracket. From there, it went back up, all the way up to 6.66 percent for those with at least $10,000,000 in adjusted gross income.
High Deductions Relative to Income Could Get You Audited
One way to offset the money you make is by reporting business expenses. It’s possible to simply report as much in business expenses as income, making you owe absolutely nothing. However, the IRS realizes how fishy this looks – since we all need money to live, how likely are people to actively spend all of their money on business expenses? As such, make sure you have all necessary documentation when it comes to the deductions you take.
Don’t Worry About Which Deductions and Credits You Take
Some people believe that taking certain deductions or credits makes them more susceptible to getting audited. This simply isn’t true. There’s no reason to seek out tax audit representation in Anaheim until you’ve received an audit notice in the mail. Read our latest blog Tips for Finding a Legitimate Accountant.
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