Fill out everything correctly
The first thing to avoid auditing ever is to fill out everything correctly as it is in the last year and double check yourself if you have a filer do it for you before you sign anything. You might be tempted to cut corners but you might get audited and you have to pya them back anyways so it’s just a waste of time and energy, so do it right the first time.
No matter what you deduct, you must have documents, receipts to back them up. Every time you go and get gas, food, clothing, fix your car, you need to keep your receipts. You need to keep your documents if you’re deducting healthcare or education or supporting another person. They will want to see all of it.
The sure way to get audited is to cheat. If you deviate too far away from your tax, you will get audited. It’s best to do it correctly to avoid future legal battle with them. You will get caught since they’re very rigorous in a recession. They need all the money that they can get.
The numbers are reasonable
You should deduct numbers that are reasonable. If you take out a million dollar of deductions on food for your freelance job, it’s obvious that it’s a lie. You can’t eat that much in a year. Your numbers should be realistics and if they look lrealistics then you won’t get audited. You should always have all receipts to back up your deductions.
Report all taxes or income earned
It’s a red flag instantly if you don’t report certain w-2, or independent cotract earnings, they will see it from your employer, and they will send a letter indicating that you did not file taxes for those income and that you owe them money. There are certain numbers that will also raise a red flag like unreasonable deductions or deductions that you don’t qualify for or that you don’t have. Even if you work and earn on Google, Ebay, you still have to report them. Even if you owe a side freelance business, you still have to report if you make over $500.
Send all documents requested
If you do get audited, you should make photo copies and send all the documents required to support your claims and deductions. This way you’re not getting penalized and you might just get away with paying back anything. They will calculate what you give them. This is why you must have a box dedicated to tax receipts for every year and save it for five years because they have that much time to audit you and mnore so if yo’re a business. If they found that you owe them money, you need to fight it one last time and if you lost, you need to pay them right away or you can accrue interest and penalties which will be a lot.