4 Mistakes That Could Get Your Taxes Audited
Each year, less than 1% of tax returns are chosen for an audit, but the idea of it happening to you may be frightening nonetheless. Now the reality is that the IRS doesn't have the resources to send agents to your door for audit purposes -- unless, of course, you're potentially cheating it out of millions. Most of the time, tax audits are conducted by mail. The IRS will send you a letter asking for more information about something you've put on your return, or proposing a change to your taxes that you either agree to or dispute. But for the sake of minimizing your stress, you're better off staying off the IRS's audit list, which means steering clear of the following mistakes.
You might think you can get away with earning $800 on the side walking dogs for a local agency, or with updating the occasional website and pocketing $1,000 in the process. But failing to report income is an easy way to get your taxes audited, so it's a risk not worth taking. Any client or company you work for on a freelance basis is required to send you a 1099 form summarizing your earnings if that figure exceeds $600 in the same calendar year. For each 1099 you receive, the IRS gets a copy as well, so don't lie about income that's well-documented.
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Source Fool.com
