The IRS audit: Everyone dreads it the possibility it could happen to them! Who gets audited the most? The rich and the self-employed are usually under the microscope. Who else?
- If you claim a home office deduction
Having that dedicated space lets you prorate some household expenses like heating bills and association fees, but that can get tricky based on square footage. The IRS will want to make sure your calculating that correctly.
- You give a lot of money to charity
The IRS knows what others who make similar income to you tend to give, and they will question you if you’re claiming too much. Keep good records.
- You deduct un-reimbursed business expenses
Most workers already get reimbursed by their employers for out-of-pocket expenses. If you don’t… things like dues, license fees, tools and specialty uniforms are all legitimately deductible. The gray area is when you get into deductions for non-allowables like commuting costs and everyday work clothes.
