Tax deadlines are fast approaching, but even when April 15 has passed and you think it’s all behind you, the audit season begins. Chances are; you will never have to go through the process of an audit. Less than 1% of filed returns are audited each year and with Federal budget cuts that percentage is expected to be smaller this year. There are a couple of main categories that do see a higher percentage of audits. An income level of $200,000 or higher will raise your risk of an audit. Self-employment also can increase the risk, usually because of the increased number of itemized deductions used by self-employed filers. If you do get that letter from the IRS in the mail, follow these 9 tips on surviving your audit.
1. Don’t panic!
It’s not the end of the world and it might not even be a big deal. Your correspondence from the IRS will specifically mention what part of your return is being audited. Full general audits of the whole return are rare, most audits are for a specific deduction you used or for a source of income you did not include. Read your notice carefully and make sure you understand ex-actly what issues they are looking at.