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After tax preparation is complete, you might think your tax worries are over. But for some, an unexpected tax audit can bring on a whole new kind of stress. Here is what you should know about getting audited.

Who Gets Audited?

Most audits will occur within two to three years after you file the tax return in question, and there are some factors that make you more likely to be audited. Math mistakes of any kind raise serious red flags. This includes using approximate numbers instead of filing exact figures for incomes and expenses. Failing to report a source of income or claiming too many Schedule C losses and work expenses can also trigger an audit.

tax preparationData from the IRS reveals that individuals who report no adjusted gross income or an income greater than $1 million are the most likely to get audited. As with many other problems in life, prevention is the best method for avoiding an audit. In this case, working with an advisor to complete your tax preparation can reduce the risk of mistakes or other issues that could trigger an audit.

How Should You Prepare?

Should you be audited, having a quality tax advisor on your side is essential. They will help you understand the tax code so you can better navigate the audit process, including how to present yourself during audit meetings. In most cases, your tax accountant can handle the entire process on your behalf.

Maintaining good records — including financial data and tax preparation forms going back several years — will also aid you as you go through an audit. The easier it is to gather records related to income and claimed deductions, the easier it will be to clear up any issues with the IRS.

If you need help with tax preparation and other accounting services, contact Sharrard, McGee & Co., PA. Serving Guilford County, NC, and the surrounding area for over 40 years, their personalized service helps businesses and individuals successfully manage complicated financial issues. To learn more about their work, visit them online or call (336) 884-0410 in High Point or (336) 272-9777 in Greensboro.

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