After your tax return is filed, you don’t really want to think about it again! But an audit can turn those plans upside down. To really set yourself up for success, you need to work with your tax preparer to make sure every detail is lined up right.
5 Best Practices for an Audit-Proof Tax Return
Mistakes happen, yet there are specific steps you can take as a taxpayer to ensure that your return won’t require additional attention from an audit. Taking these steps can give you a smooth process for every tax year.
1. Track all of your forms
There’s a good chance that you’re like most Americans and receive multiple 1099s and W-2 Forms in the mail. It’s important to remember that the IRS receives these documents too. Making a list of the forms you received last year can help you anticipate what you need to watch for with this tax year. Be sure to update your checklist with any new employers or vendors too. This is a smart practice for confirming that nothing gets overlooked.
2. Always match your reports
This tip might sound strange, but it’s crucial for keeping the IRS on track for processing your tax return. If for some reason there’s an amount on your W-2 or a 1099 that’s incorrect, you should still go ahead and report that incorrect amount. Ideally you would try to get the form updated before filing your return, but that’s not always possible.
By matching the numbers and keeping them consistent with the IRS records you can avoid further confusion. Then you can move forward and correct it with an explanation.
3. Double-check your key information
Although it’s simple, you can save yourself from a big headache down the road by looking over your finished return one last time before filing. Take the time to review your Social Security number on your tax return. Also make sure that your name on your Social Security card matches your return. The IRS will definitely be contacting you if there are any discrepancies.
4. Make sure your dependents are correct
When it comes to dependents, how you fill out your return can directly impact someone else. Communication is key. You and your ex will need to be consistent in reporting your children as dependents. You can’t both claim the same child as a dependent. Get these details squared away before you start your return.
5. Keep organized records for your defense
We’ve been experiencing historically low audit rates. However, the chance of being audited is expected to rise since the IRS has been actively hiring. Being prepared for the worst can help give you peace of mind.
Organizing your tax records throughout the year can make a big difference when the next tax season rolls around. Plus it will put you in a better position to have a streamlined audit process, on the chance that your return is actually flagged for an audit. With your records in order, you’ll be able to prevent a streamlined case to defend your deductions. As always, if you need help along the way, our team would be happy to assist! Send us a message anytime to get started.