Navigating Tax Deductions: Avoiding Audits While Maximizing Savings
Thursday, 21 March 2024, 10:00
Will Itemizing Deductions on Your Taxes Increase Your Risk of an Audit?
A tax audit is something you may want to avoid. Will itemizing on your taxes increase your chances? Read on to find out.
The IRS and Tax Enforcement
The Inflation Reduction Act of 2022 allocated $80 billion to improve customer service and ramp up tax enforcement. High-income individuals and corporations are the main targets, so average earners need not worry about increased audit rates.
Honesty and Accuracy
- Lying on your tax return increases the likelihood of an audit.
- Itemizing deductions shouldn't raise your audit risk if claims are truthful and accurate.
- Proper documentation is vital to back up deductions.
Disproportionate Claims
- Large deductions relative to income may attract IRS attention.
- With proper proof and explanation, legitimate deductions can be claimed.
- Professional assistance is recommended for complex tax filings and potential audits.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.