So what may trigger an audit?
1. Not reporting all of your income: The IRS cross checks your income sources with 1099s and W-2s. If your income has dropped that may be a red flag.
2. Claiming large charitable deductions: The IRS calculated what the average donation is for a person in your income bracket. Any contribution over $250 you will need a letter from the charity.
3. Earning a bunch of money: Over $100,000. You are 5 times more likely to be audited if you make the big bucks.
4. Taking higher than the average deductions: If the deductions on your return are disproportionately large compared to your income, the IRS audit formulas will go “tilt”. So if you have large medical deductions be sure you can prove them if need be.
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That's the distinct scent of Tax Season approaching. The folks at Kiplinger recently put together a roundup of 14 IRS Audit Red Flags.Read more