March, 2015

How Do I Prepare for a Tax Audit? | The First National Bank Blog

March 24th, 2015
How Do I Prepare for a Tax Audit? | The First National Bank Blog image

It starts with a letter or a phone call. The IRS notifies you that you’re being audited. The first question you’re likely to ask is why your return was singled out. The answer is the IRS has a system for comparing each tax return against a set of norms or similarities found on a significant number of returns filed by other tax payers. If your return deviates too far from the norms, it may be reviewed for a tax audit. Will the audit be face-to-face? It depends. Some audits can be settled through the mail. Correspondence Audits, as they’re sometimes [ read more ]

Tax Audit Myths | The First National Bank Blog

March 17th, 2015
Tax Audit Myths | The First National Bank Blog image

“Only rich people get audited.” “I would know right away if the IRS finds problems with my tax return.” “If I’m audited, I can expect a visit from an IRS agent.” These and other tax audit myths still circulate today even though the IRS has changed many of its practices. This month’s shared blog from Yahoo Finance looks at what might trigger an audit and what tax payers should (and shouldn’t) expect during the audit process. http://finance.yahoo.com/news/myths-about-tax-audits-irs-181533675.html What tax audit myth do you still hear people repeating? Let us know in the comment section below. [ read more ]

How Do I Avoid an IRS Audit? | The First National Bank Blog

March 10th, 2015
How Do I Avoid an IRS Audit? | The First National Bank Blog image

Reports of IRS staff shortages have convinced many people that tax audits are becoming increasingly rare. While the odds of being audited are less than 1-in-100, most of us would rather not risk one. Here are four ways to avoid being singled out for an audit: 1. Be Honest While this may seem like pretty straightforward advice, the temptation to fudge can be very strong. Don’t conveniently forget to declare a large sum of money from a freelance job or creatively classify your new man-cave as a home office. If you’ve done a large freelance job, even if you were [ read more ]