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Avoid an Audit by Avoiding Certain Deductions

Avoid an Audit by Avoiding Certain Deductions

When you’re filling out your tax returns this year you need to know there are some deductions which make you more likely to be audited.

It doesn't mean you shouldn't still claim them.  But, they can be red flags for the IRS and you could find yourself across the desk from an auditor.  CPA Joe Mastriano says you have to know the what you’re doing.

“Things like earned income credit is a big target,” Mastriano explains, “because a lot of people take and they put down kids that are not theirs and they are not entitled to it.”

Other things to avoid:  is your giving to charitable causes out of line with your actual income?  If your business activity has listed a loss for three straight years, the IRS may decide it's a hobby.  And, especially avoid stupid stuff, like bad math and typos. 

Despite the cautions, Mastriano says he is aggressive in his advice.

“Take the earned income credit, take the office and home expense, take the employee business expense,” he says.  “Take whatever expenses you are entitled to, but you document that you have the receipts.”

 

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