Preparing your taxes for filing each year is stressful enough. Worrying about whether your return may be audited can create a whole other level of stress.
Most tax returns are fairly straightforward, but if you’ve made extra money through a side hustle or had a change in your life circumstances, there may be new forms to file.
Here are a few things you can do now to minimize the risk of an audit in the future.
If you’re over 50, take advantage of massive discounts and financial resources
Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.
How to become a member today:
- Go here, select your free gift, and click “Join Today”
- Create your account (important!) by answering a few simple questions
- Start enjoying your discounts and perks!
Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.
Check your math
Getting tripped up by math on a tax return is one of the most common errors, according to the IRS. It can be easy to miss some basic math with all the calculations you might have to make.
Be sure to double-check your math before submitting your return. This kind of mistake may slow down your refund and trigger your return for a possible audit.
Don’t take too many deductions
Deductions can be helpful if you’re taking them for legitimate reasons such as charitable donations, student loan interest, or retirement contributions.
But too many deductions could be a sign that you’re trying to save too much money by taking deductions you don’t qualify for.
Instead, limit your deductions or don’t include those that may be borderline. It’s also important to ensure you have documentation to cover all of your deductions in case you get audited.
Keep charitable contributions in check
Making charitable contributions may be a way for you to help others or support a cause you believe in. You can also take a dedication for them on your tax return.
But you must be honest about how much you’ve given in charitable contributions and don’t inflate your contributions. You should also make sure you have receipts for your contributions to use in a potential audit.
Resolve $10,000 or more of your debt
Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.
National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1
How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.
File on time
There are times when life gets in the way, or you’re having trouble pulling together the paperwork needed for your return. You may even decide to file for an extension.
But filing on time each year (by April 15, 2024) shows you’re in compliance with IRS rules and won’t throw up red flags with the IRS later on.
Remember to sign your return
You’ve spent all this time preparing a return and checking your math over and over again. But that could make you forget something as simple as signing the return before you file it.
You could get penalized for an unsigned return, which could bring unnecessary attention to you.
Trending Stories
Track all of your income
Side hustles can be a great way to make some extra cash or turn a craft or hobby into cash. But just because it’s a side hustle and not a full-time job doesn’t mean you can ignore that income on your tax return.
You should receive 1099 forms from employers you have freelanced for; they file those with the IRS, too. If you make money from a side hustle, be sure to account for all of that income, especially if you’re taking self-employment deductions.
Rein in your home office costs
If you're one of the millions of people working from home either full- or part-time, you probably want to take the home-office deduction.
But it's important to take a critical look at the office space in your home and determine exactly how much you can deduct as office expenses. Inflating your office costs could be a red flag for the IRS.
And remember that if you're a W-2 worker — your employer withholds taxes on your salary — you're not entitled to take the home-office deduction.
Don’t round your numbers
You may be tempted to make it easier for yourself by rounding numbers when it comes to income, deductions, or other income and expenses.
But the IRS wants you to be precise so they know exactly how much you owe. Rounding numbers will look suspicious, especially if the rounded numbers you use don’t match the exact numbers on the documentation you send in.
Make sure your information is correct
The IRS will check everything on your return to ensure its accuracy, and incorrect information can cause issues with your return being filed properly.
Numbers are important, but so is basic information like your name and address. Your Social Security number is a very important identification number, so you’ll also want to ensure it’s correct before you file your return.
Earn cash back on everyday purchases with this rare account
Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!2
With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!
This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.
Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.
Factor in dependents
While your family pet can't be claimed as a dependent, trying to do so will raise a red flag for the IRS. But if you have human dependents, there may be subtle issues to consider.
If you're divorced, you'll have to consider which parent will claim the children as dependents. You'll also have to decide who qualifies as a dependent as children get older.
If you have an aging parent living with you, claiming them depends on their annual income as well as how much you spend to care for them.
Remember retirement withdrawals
You may have saved money in a retirement fund, but accessing that cash now will have tax consequences.
You must account for any withdrawals from your 401(k), IRA, or other retirement accounts and pay taxes on that money if you took a tax deduction when you contributed.
If you have a Roth IRA or Roth 401(k), you've already paid the tax on those contributions, so those distributions are tax-free now.
Don’t claim political contributions
You may decide you want to contribute to a particular candidate or election cause that is important to you, especially as the 2024 election cycle begins to gain more attention.
However, unlike charitable contributions, political and election contributions can’t be deducted from taxes. Therefore, remember to keep them off your tax return.
Bottom line
Preparing a tax return can be stressful, but taking a little extra time to review it before you file it can save you money and hassle later on.
The sooner you file your return, the sooner you’ll get your tax refund if you’re entitled to one. Consider how you plan to spend or invest any refund.
You may want to start investing or open a high-yield savings account to earn interest on your refund.
Lucrative, Flat-Rate Cash Rewards
FinanceBuzz writers and editors score cards based on a number of objective features as well as our expert editorial assessment. Our partners do not influence how we rate products.
Wells Fargo Active Cash® Card
Current Offer
$200 cash rewards bonus after spending $500 in purchases in the first 3 months
Annual Fee
$0
Rewards Rate
Earn unlimited 2% cash rewards on purchases
Benefits
- Low spend threshold for its welcome offer — $200 cash rewards bonus after spending $500 in purchases in the first 3 months
- Cell phone protection benefit (subject to a $25 deductible)
- Can redeem rewards at an ATM for literal cash
Drawbacks
- Foreign transaction fee of 3%
- No bonus categories
- Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 19.74%, 24.74%, or 29.74% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don’t expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
Subscribe Today
Want extra-cash moves to come right to you?
Stop browsing endlessly. Get proven ways to earn pocket money, help cover rent, and crush your debt — sent to your inbox daily.