The odds of being audited by the IRS are low. Fewer than 1% of tax returns are singled out for review. Your chances can go up, though, if you raise certain red flags. Here are three of them.
Reason #1: You make too much money
Audit odds go up as your income goes up. Make more than $200,000? There's a 1-in-37 chance your return will be audited. Make a million? It’s 1 in 13. But if your income is less than $200,000, the rate drops to just 1 out of 128 returns. (To see where you rank as a taxpayer try our simple tax calculator.)
Reason #2: You run a small business
Running a small business can attract the attention of IRS agents, who know from experience that self-employed taxpayers sometimes claim excessive deductions and don’t report all income. Special scrutiny is given to cash-intensive businesses such as taxis and hair salons.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Reason #3: You make large charitable deductions
The IRS knows the average charitable donation for taxpayers at your income level. If your donations are unusually large, they might draw attention. Keep receipts and get appraisals for valuable donations.
There are 13 more tax audit red flags you should know about. Take a look.
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical TensionThe main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
What's at Stake for Alphabet as DOJ Eyes Google's ChromeAlphabet is higher Tuesday even as antitrust officials at the DOJ support forcing Google to sell its popular web browser. Here's what you need to know.
-
Finding the Right Financial Planner During a RecessionFinancial Advisers Navigating your way through a financial downturn takes resolve and know-how. Having the right person at your side during this touchy time could be critical.
-
What You Should Look for in a Financial ProfessionalFinancial Advisers The vast majority of Americans value the advice of a financial professional. Here’s how to choose the right one for you.
-
How Psychology Affects Your Search for a Financial AdviserFinancial Advisers Your emotional relationship with your financial planner plays a big role in how successful your collaboration will be, so picking a person you click with should be a high priority.
-
Finding a Modern Financial Adviser: 3 Questions to AskFinancial Advisers Today’s challenging economic climate calls for a financial adviser equipped to adapt. Here’s how to see if yours is up to the task.
-
5 Quick and Dirty Questions to Pick a Financial AdviserFinancial Advisers Yes, you can boil a complicated vetting process down to just five quick questions. Or you could dig deeper. The choice is yours.
-
Tax Tips for Last-Minute FilersBrandon Copeland Atlanta Falcons linebacker and Kiplinger contributing editor Brandon Copeland provides a few tax tips for people filing close to 2022's deadline.
-
How to Achieve Your 2022 New Year's ResolutionsBrandon Copeland You've already made your New Year's resolutions. Atlanta Falcons linebacker and Kiplinger contributing editor Brandon Copeland explains how you can stick with them and accomplish them.
-
Santa's End-of-the-Year Finance TipsBrandon Copeland Atlanta Falcons linebacker and Kiplinger contributing editor Brandon Copeland shares a few ways you can improve your finances before 2022 gets here.
