Internal Revenue Service, Taxes, Government Taxation And Revenue, Tax Planning

Internal Revenue Service, Taxes

Here's when your tax return could spark interest from the IRS

Here's when your tax return could spark interest from the IRS

25.1.2020

Here's when your tax return could spark interest from the IRS

Some aspects of tax returns generate more scrutiny than others, and IRS computers are adept at weeding those out.

who will handle an estimated 150 million returns. While most people will never face an audit — only 0.45% were audited in fiscal year 2019 — there are other types of IRS inquiries, such as a notice of income-reporting discrepancy and proposed additional tax due. Those communications fall short of an official audit, which the IRS gets three years to initiate after the challenged return is filed. The biggest factor that lands you most at risk for an audit is making a lot of money: If your income is between $1 million and $5 million, the audit rate jumps to 2.21%. For returns with $10 million or more, it's 6.66%. However, even if your income is lower, don't assume you won't generate attention — income isn't the only consideration. Here are some common things that could cause the IRS to look more closely at your 2019 tax return. Unreported income One consistent thing that will spark IRS attention is a discrepancy between your reported income and the information the agency has. Remember, all those forms you receive showing income — i.e., your W-2 from work, a 1099-MISC or 1099-K reporting side income or 1099-INT showing taxable interest of $10 or more on a bank account — also go to the IRS. And if you fail to report any of those earnings, you'll hear from the agency — the discrepancy will generate an automatic letter. "It can be hard to keep track of all the forms if you have income from a variety of sources, but the IRS does a good job of matching them [to your reported income]," said CPA Sarah Shannonhouse, a manager in the tax practice & ethics section for the American Institute of CPAs. VIDEO Read more: CNBC

Taxation is theft. Stoped paying taxes !!! I’ll tell you when it doesn’t - when you’re super rich. Claiming 15 cats as dependents?

That letter from the IRS could be a fake. Watch out for this tax scam and others in 2020Crooks want your Social Security number and other personal information to file fake returns so they can to steal tax refunds.

That letter from the IRS could be a fake. Watch out for this tax scam and others in 2020Crooks want your Social Security number and other personal information to file fake returns so they can to steal tax refunds.

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