Common Tax Audit Trigger Myths


The tax audit is a looming fear in the minds of many taxpayers who imagine the IRS as some kind of Big Bad Wolf in a black suit who will blow your house down as soon as he finds the slightest error in your annual filing. To most, the realm of tax requirements and penalties is vast uncharted territory, and a great deal of misconceptions arise about things like deductions, credits, and especially auditing. Put your mind at ease and keep your returns going smoothly by understanding the most common myths about tax audit triggers.

Some people fear that filing for certain deductions or credits increases their chance of being audited, and this fear inspires them to simply fork over money to the IRS that they honestly don’t owe. A parent may feel apprehensive about claiming children as dependents because of time the children spend with their other parent. Professionals who work from home often avoid claiming the home office deduction for fear of a visit from the Big Bad Wolf. Some taxpayers even neglect to go for educational credits and other tax benefits to which they are entitled. The fact of the matter is, these things do not increase your chance of an audit. As long as everything is honest, true, and accounted for, you have nothing to worry about.

E-filing has become a valid option for many taxpayers due to its simplicity, ease of use, and convenience, yet a good portion of the population is skeptical of e-filing. They imagine, for any number of reasons, that electronic filing is more likely to draw attention from the IRS and result in auditing. In reality, the opposite is actually more likely. E-filing has the benefit of reducing mathematical errors on your tax return, effectively making your paperwork and calculations more accurate and less likely to be audited. Don’t be afraid of technology, for it can actually work in your favor.

Everyone has their own unique situation in life, and for some this means filing for extensions on their taxes for one or another reason. Finances may be too tight to make the necessary payments, or paperwork could be disorganized or missing, causing the taxpayer to be unprepared at the deadline. Many of these folks fear that filing for extensions on their taxes will make them targets for auditing, but this also is usually untrue. In fact, IRS workers have a quota to meet for audits, and thus their strongest gaze is directed at the early filers. Tax returns filed under extensions often come in after the quota has already been met.

All in all, the fear of auditing and the myths about its triggers are very much overblown. Go ahead and file for extensions and claim your deductions. You most likely won’t be audited for these things, and even if an audit does come your way, you’ll have nothing to worry about if you’ve been honest and accurate. Don’t be afraid of the Big Bad Wolf.

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