5 Highlights On Audits And Tax Clearances

Things That Can Cause Your Tax Return to Be Flagged For Audit

13:45 23 March 2013

Tax laws can be complex and confusing, and the average person doesn’t really have a desire to be known as a “tax expert”. But when it comes to filing your yearly personaltax returns it’s in your interest to know and understand the changes that have taken place, and how they will affect your 2012 tax return.

 

People are always searching for “loopholes” to try to get out of paying more taxes. But be careful because these loopholes can raise red flags that may cause you to get audited.

 

Nobody wants to get audited. It is not a fun process to say the least. So here are things that raise red flags and may cause you to get audited:

 

• Excessive mileage claims for businesses. You need to keep a detailed log of your mileage, especially if it is excessive.

 

• Not claiming all of your income. Please note that any legitimate company that pays you will file the appropriate government paperwork indicating so, and how much you were paid. Eventually your numbers will fail to match up and a red flag will go up.

 

• Claiming huge losses against your income. In actually any claims for losses of any amount normally calls for a review at the very least. Do not claim losses that you cannot verify.

 

• Claiming home offices expenses is often considered questionable, although it is becoming more acceptable as more people take advantage of work-from-home opportunities.

 

• Higher income earners are now facing more audits due to their ability to afford the type of legal assistance that can find “loopholes” that are not actually legal.

 

If you hire someone to do your 2012 personal tax returns, do your best to ensure that it’s a professional who knows and understands tax laws and who will work to get you the best return possible, while keeping you within the boundaries of the laws and tax codes.