Filing a complete, neat and mathematically accurate return will significantly reduce your risk of being audited.

Red Flags

Individuals:

• Make sure the address on this year's return matches last year's
• Check to ensure all social security numbers are correct
• If your wages don't match your W-2's you'll get a letter from the IRS
• Many IRS inquiries stem from unreported interest and other income from 1099's. The IRS matches these up electronically.
• Low income but large deductions
• Unusually large deductions as compared to prior year
• Improperly reporting passive losses
• Withholding and estimate payments that don't agree with your return
• If you have doubts ask a professional

Business:

• Deductions that appear excessive compared to your income: Travel and Meals for Business
• Large repair expenses that should be capitalized
• Too big of a deduction for your retirement plan
• Payroll tax returns that don't agree with your income tax return
• Failure to properly carry over information from prior years
• Inventory doesn't agree with the prior year return
• Large numbers, grouping income or deductions into one item

To have your taxes reviewed by a professional or if you have questions about your tax return or deductions please call us today. 916-482-0778 James Marta, CPA, ARM