Many people here in Fort Worth and elsewhere make mathematical mistakes on their income tax returns. Those types of errors do not ordinarily trigger an IRS audit. Instead, oversights and overly deducting tend to bring a person’s tax return to the attention of the nation’s taxing authority. Below are two instances where an error could prove costly.
First, if you forget to report any income, it could trigger an audit. The IRS receives copies of income reporting forms from employers, companies who use contractors and banks with interest bearing account holders. If an individual fails to report any of that income, it could come back to haunt him or her. In many instances, the fix is easy, but it may require the payment of additional taxes.
Second, being self-employed may be a dream of many Fort Worth residents, but the realities of it may not always meet the expectations, especially when it comes to taxes. Individuals who are self-employed need to be careful about the amounts they claim for certain tax deductions. Of course, if a person has the ability to take a deduction, do so. Ordinarily, the amounts are what the IRS has a problem with. For instance, if the norm in a person’s industry is 15%, but a person claims 30%, it could raise a red flag.
These are just some of the errors or oversights that could trigger an IRS audit. Perhaps the best course of action would be to work with an experienced tax attorney to help ensure that the final result does not raise any red flags. However, if that does happen, that same attorney could help guide and assist you through an audit in an attempt to minimize the amount of additional taxes, penalties and interest an individual may end up paying.