Whenever it’s about taxes, I cross my fingers and hope everything will turn out fine. But it’s not always like this. And most of the time, we should be aware of this. And we all know how much the IRS can mess with our heads. Are you aware of what “IRS” means? The Internal Revenue Service is a service that works for the United States government and is responsible for taxes.

This service is in charge of checking all of your data you’ve sent to make sure you’re not lying. Of course, you don’t have to worry about this if you’re telling the truth and nothing but the truth. Otherwise, you should be concerned about the audit.

Keep in mind that the IRS selects people to audit based on suspicious activity, so if you feel like you are not good at calculating your taxes, make sure you ask for help. So be sure you stay away from an IRS audit by avoiding these 9 things.

1. Making math errors

When you file taxes, you shouldn’t make any errors, and by errors, I’m referring to the times you accidently write a 3 instead of an 8. Don’t forget to write down every number. Of course, you can make mistakes, but make sure you read everything twice before sending it. Even if this was unintentional, you’ll be fined accordingly.

If your math skills are a little bit rusty, you can always check out Turbotax or Taxact, one of the two best software packages that will help you get through the tax season with no further headaches. And if those are not enough, don’t be shy about asking for help. Not everybody is an expert when it comes to calculations! Make sure you do everything to avoid fines or a spontaneous audit.

2. Unreported income

I bet you don’t want to be called for an IRS audit! Because if you think about leaving a little money from your total income and decreasing the taxes, you must know it’s not a good idea. In case you didn’t know, the IRS compares your actual income to the one from the previous year.

If there is a big difference between them, you can be sure they’ll notice, and you’ll be called for an audit. If you happen to make money out of freelancing, you should mention that too.

Because 1099 reports nonwage income from things like stocks and freelancing. One sort of 1099, the 1099-NEC, regularly reports sums paid to autonomous temporary workers. Don’t forget to report all of your income sources if you don’t want to become a suspect of fraud.

3. Self-Employment

You must know that the IRS tends to examine self-employed individuals carefully. Especially if you don’t report your profit at all. This can lead to more complications simply because the IRS doesn’t allow businesses with no profit. They say you can keep it as a hobby instead of a company. You may be suspected of dodging the annual tax.

4. Using only round numbers

If you are like me, then you probably used to struggle a lot with math in high school. And that’s OK. But when it comes to the IRS and taxes, you should know that you can’t fool Uncle Sam. When you are making your calculation, make sure the numbers are correct and you don’t make any estimations.

If you have a small business and you don’t know for sure what the exact price was for everything you bought, ask your accountant. If something is around $465.20, make sure you round it up to $466.

Perfect round numbers will draw the IRS’s attention in the blink of an eye.

5. Overstating deductions or disproportionately high deductions

Don’t get me wrong, donating to charity is a noble thing. That’s why you shouldn’t overthink it because every time you make a big donation, keep a receipt as proof in case the IRS has something to say about it. If you have a small business, make sure all your profit is clean and up to date. If you have had a lot of expenses in the past few years, make sure you have all the receipts.

In recent times, a lot of the rules for home office deductions have been renewed, and the rules are simpler. But that doesn’t mean you won’t be called in for an audit.

The IRS tends to believe that home offices are scams. And you won’t be able to deduct it if you use it for living as well.

6. Reporting too many losses on a Schedule C

This is directly connected to self-employment. If you have your own business, you may think it’s a good idea to report only some parts of your income. A lot of people hide their income by filing personal expenses as business expenses. If you are doing this, you may want to reconsider because the IRS will be suspicious about it.

If you report that you have more losses than actual earnings, they will definitely ask you how your business is still active in the market.

Be an honest person!

7. Wrong filing status

This is much more complicated and usually requires a lot of professional help. It’s either you or your spouse who is unemployed or self-employed, and it’s hard to determine the exact amount of money you both have. If you change your filing status and it differs from the last year, the IRS might call you for an audit.

If you are recently divorced, make sure you have all the papers you need to prove it in case you file as single or head of household. How do you feel about taxes? Are you able to calculate everything on your own, or do you need some professional help?

8. Claiming non-existent dependents

The IRS watches people who are trying to scam them. In a lot of cases, some declare they have children but they actually don’t or claim pets as children in order to minimize their taxes. And that’s wrong! If you are not sure about the rules and everything related to the IRS, read their guidelines. It may differ from one state to another.

For example, split households can claim dependent children on both returns despite the fact that they no longer file jointly. On the other hand, you should be careful when it comes to child custody as well. Make sure you are well-prepared in case the IRS decides to audit you.

9. Discrepancies between individual taxpayer and corporate filing associated with taxpayer

When it comes to corporations, you must know that not all of them are large establishments. If you are a shareholder in a business, then you must know that the IRS will compare your tax return to the one filed by the corporation in order to have everything in order. The numbers must be the same, and if there’s a difference, you’ll probably be called for an audit.

I am scared of audits. And tax season is always a pain in the neck for the majority of us. But if you are well-prepared and you have all the papers you need to prove that what you’re saying is true, then you don’t have to worry about the IRS.

What are your plans regarding tax season? I usually call for a professional every time I fail to understand calculations. There are a lot of agents that can help you with this issue.

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