There is not one individual that dreams of being audited by the IRS but it can’t be helped that there are a few that may have to be examined. Keep in mind that chances of being audited is very slim but there are things that you could do that could trigger the IRS to do an examination. Some of these reasons can be as simple as an error in the information provided which is totally within the control of the taxpayers. There are unavoidable circumstances and one of them is tax deductions.
There are three kinds of tax deductions that might boost your chance of being audited.
- Tax deductions for charitable donations. There are a number of advantages that a person could get from giving donations to charitable institutions. One of them is the good feeling of being able to help and contribute to a good cause and another is the possibility of getting a tax deduction. Just make sure that all rules and regulations are followed into making charitable donations in order to be qualified for a tax deduction. Donations can be given in various forms such as cash, checks, credit card payments, household items and even vehicles. The donated items must be in good condition and deduction must be based on the fair market value of the item.
- Tax deductions for business expenses. There are different types of deductions that could be included in the tax returns – business miles driven and home office deductions. For home office deductions, there are specific rules to be followed such as the room must be used solely for business purposes. For cars that you use for business, the expenses can be deducted as well as long as it is business related.
- Tax deduction for medical expenses. There is a very important rule when it comes to tax deduction regarding medical expenses, the amount can only be qualified it the expenses if more than the 10 per cent of the individual’s adjusted gross income. No tax relief will be given to medical expenses that are less than the 10 per cent of the AGI.
To make sure that your taxes will be filed accordingly with very little chance of error and comes with audit insurance, it is best to hire a certified accountant to do the job.