8 red flags for an IRS tax audit

Significant Income Changes - Sudden, significant changes in income, either up or down, can trigger an audit.

Failing to Report All Taxable Income - This includes all W-2s and 1099s. The IRS receives copies of these documents, and discrepancies between these forms and your return can easily lead to an audit.

Claiming Large Charitable Deductions - While donating to charity is commendable, donations that are disproportionately large compared to income can raise questions.

Home Office Deduction - This deduction is legitimate if you meet the strict criteria, but because it has been historically abused, claiming a home office deduction can be a red flag

Rental Losses - Real estate rental losses can attract scrutiny, especially if you claim to be actively involved in rental activities to qualify for the loss deduction.

Business Expenses - Large deductions for business expenses, especially if those expenses are disproportionate to your business income or in comparison to others in your industry

Foreign Bank Accounts - Failing to report a foreign bank account can lead to audits and severe penalties. The IRS is very interested in taxpayers with offshore accounts

Round Numbers - Consistently rounded numbers on your tax return can suggest estimation or fabrication of expenses. It's best to report exact amounts to avoid this scrutiny.

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