Naples, Florida, August 29th, 2017—National accounting firm, Bodine Perry informs the public on how to avoid being audited by the IRS. The firm has offices in Canfield, Ohio, Warren, Ohio, Columbus, Ohio and two offices in Naples, Florida, and has been providing expert accounting, tax, business and finance advice to clients for over 15 years.
Check Your Figures
Erroneous data entry is one of the most common accounting errors, yet it is the most preventable. People are often careless about their taxes and they do not double check their returns. To avoid such errors, it is advisable to wait for your income reports, investment and bank statements before you start your tax return. Simple things like correctly reporting dependents, as well as exemptions and also ensuring that your numbers match are important. It’s also a good idea to check for simple mathematical errors that you might make innocently.
Report Realistic Deductions
Reporting unrealistic deductions, whether as an individual or as a business owner might raise a red flag with the IRS. When you make donations of items, such as clothes, it might be difficult to determine the actual value of your donation. Some other donations that you should pay attention to include:
- Mileage to perform charitable services
- Education and research expenses
- Interest paid, such as mortgage interest
This is very subjective, since it is up to the taxpayer to determine the value of their donation. According to the IRS, the individual value of items donated should be between 1% and 30% of the purchase price. Many taxpayers are not aware of this or they might just ignore this fact.
Report All of Your Income
While it might be tempting to exclude some income from your tax return, it is not advised. It is very important that you report all income, whether from work or from selling an asset, such as a home. If the IRS discovers that you are not fully reporting your income, you will have to pay back taxes and penalties and interest accrued in the period.
Keep Accurate Records
If you have extensive files or records for the year, the higher the chances of escaping an IRS audit. If you seek to claim a huge deduction, make sure you have documents to back your claim. This especially goes for large amounts, since the IRS will pay more attention to discrepancies of higher values. For example, if you claim that your car is 100% for work. If you make such a claim, ensure that you have a mileage log to back you up.
Dan Perry, Co-Founder of Bodine Perry talks about how an IRS audit can impact you and what to do going forward.
“No one looks forward to an audit by the IRS. If the IRS decides to audit you, there is very little that you can do to stop the audit, other than talk with a professional accountant to assist you. It may be a stressful time, but all of this can be avoided by ensuring that you’re taking the proper steps now, so that you can avoid an IRS audit later,” he says.
About Bodine Perry
Bodine Perry was founded in 2002 by Matthew Bodine and Daniel Perry. Beginning in a small office in Ohio, the firm continued to grow and acquire other practices. Now with offices in three Ohio locations and two in Naples, Florida, Bodine Perry continues to grow, providing unparalleled accounting, tax, and consulting services to their business and individual clients.