How to Avoid a Tax Audit

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Avoiding a tax audit is possible by being completely honest about deductions, but audits can still occur even without any red flags on a tax return. Be straight with the IRS to lower the chances of auditing with information from an IRS tax agent in this free video on personal finance.

Part of the Video Series: Paying Taxes
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Video Transcript

On this segment we will talk about how to avoid an audit. Sometimes they're unavoidable. They, IRS sometimes will just choose you arbitrarily and you have no choice in what's happening. They will send you a letter and ask you to supply backup documents for certain deductions you took on your tax return. If you have all your documentation, that is not a hard request. So basically what you have to do is play it very straight with the IRS, don't fabricate things. Claim every deduction that you are allowed and keep your documentation. Also avoid red flags on your tax return. For instance don't claim 30,000 miles driven for work each year because unless you're a messenger, when are you working? You're just driving. So be very straight about it and that will help you stay out of an audit situation. Thank you.

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