Use a Computer
Tax documents that are typed and look professional are less likely to be harshly criticized. Imagine a tax return that was sloppily written by hand. This format may draw more attention and potentially an unwanted tax audit. The IRS classifiers look for professionalism when assessing documents for audit. Programs such as TurboTax and MacinTax can help people prepare their own tax returns.
Use Exact Numbers for Deductions
Numbers that are rounded may look more as if they were made up and less like they came from exact documents and reference materials. Use exact numbers to show good record keeping and increase the chances of avoiding an audit.
Have Documentation for Large Deduction Claims
Events that sometimes occur such as an earthquake or fire may warrant a large deduction. However, these items need substantial documentation that should be attached to the tax return. Examples of reasonable proof may include repair receipts, insurance reports and even pictures. An audit is still possible but may reduce the chances.
Stay Away From Schedule C, Profit or Loss for Business
These forms are used to report net losses from a small business. By nature, these types of income tax returns are more likely to result in an audit. Avoid filing these types of forms.
Don’t File Electronically or Use Preprinted IRS Address Labels
Using these labels expedite the IRS processing cycle. On one hand, slowing the IRS process could be beneficial. However, the refund comes faster through electronic filing. In this case, the pros and cons will need to be weighed.
Become a Resident of A Low Audit Area
Across the United States, different areas are more likely to be audited than others. It may be possible to choose a tax reporting address with a lower chance of audit. Ask a tax professional or stop by a local IRS office for more information.
For more information about tax returns and other legal information, visit the article here at Nolo.com.