Sometimes the best way to avoid something is to know what attracts it. Thankfully, J.D. at Get Rich Slowly has put together a list of suspicious items that will set off an audit flag on your return. Here are a few:
•Unreported income — This is a no-brainer. If you file a return but fail to report income received, you’re heading for trouble. All of your interest, dividends, and miscellaneous income must be reported. Remember: everyone who sends you a 1099 is also sending one to the IRS.
•Round numbers — It’s unlikely that your investment returns were exactly $500, or that your mortgage interest deduction was $10,000. Too many round numbers on a return are a symptom that something fishy may be going on.
The best way to avoid an audit is to be honest and organized!.—MEGHANN MARCO