The US Internal Revenue Service uses computer programs to identify unusual patterns in tax returns that may signal errors or underreporting. Although audits are rare (less than 1% for most people), certain “red flags” can increase your risk. Here is a simple breakdown of the main ones.
Key red flags and how to avoid them
🚩Do not report all of your income
If you forget to include side jobs, freelance work, or even small payments, such as from apps, it may look like you are hiding money.
Tips:
Track every penny you earn.
List all forms, such as 1099 or W2, on your tax return.
Double-check your bank statements against your documents.
🚩Large fluctuations in income
A sudden jump or drop (for example, doubling in one year and halving in the next) may indicate unaccounted money or errors.
Tips:
If necessary, explain any changes in your notes (e.g., job loss).
Keep pay stubs and previous tax returns handy for proof.
Aim for consistent reporting from year to year.
🚩Too many or huge deductions for business
Claiming large expenses for a small side job (such as food or travel) may seem wrong if they eat up most of the profits.
Tips:
Deduct only what is normal and necessary—keep your receipts.
Keep a business journal, separating personal and business expenses.
🚩Large or irregular charitable donations
Why this flag: Donating much more than your income allows (e.g., 50% of your earnings) raises suspicion without proof.
Tips:
Receive receipts from charitable organizations for each gift.
Use bank statements to proveверки.
🚩 Mathematical errors or careless submission of documents
Why this flag: Simple errors, such as incorrect additions or mismatched social security numbers, trigger automatic checks.
Advice to avoid:
Check for errors before filing your return.
Review your return twice or have a professional review it.
File your return on time to avoid additional scrutiny.
🚩 Foreign accounts or foreign income (for expats)
Why this flag: Missing reports on foreign banks (FBAR) or large international transactions look suspicious.
Tips:
File an FBAR if the total amount of your accounts exceeds $10,000.
Report foreign income accurately.
Keep documentation for 3–7 years (IRS audit window)!
IRS Audits: How to Avoid Red Flags in 2025
The US Internal Revenue Service uses computer programs to identify unusual patterns in tax returns that may signal errors or underreporting. Although audits are rare (less than 1% for most people), certain “red flags” can increase your risk. Here is a simple breakdown of the main ones.
Key red flags and how to avoid them
🚩Do not report all of your income
If you forget to include side jobs, freelance work, or even small payments, such as from apps, it may look like you are hiding money.
Tips:
🚩Large fluctuations in income
A sudden jump or drop (for example, doubling in one year and halving in the next) may indicate unaccounted money or errors.
Tips:
🚩Too many or huge deductions for business
Claiming large expenses for a small side job (such as food or travel) may seem wrong if they eat up most of the profits.
Tips:
🚩Large or irregular charitable donations
Tips:
🚩 Mathematical errors or careless submission of documents
🚩 Foreign accounts or foreign income (for expats)
Tips:
Keep documentation for 3–7 years (IRS audit window)!
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