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Tuesday
Apr122011

Tax Tip: How to Cut Your Risk of an Audit

Comstock/Thinkstock(NEW YORK) -- Anyone who’s come under tax audit will tell you -- it’s not a whole lot of fun.

“The best way to avoid it is making certain that you are reporting all of your income," tax accountant Janice Hayman said. She says failing to report all of your income is probably the number one cause of audits.

“You want to keep track during the year of all of the different employers you've had and make sure you are reporting everything that they're sending to you by way of W2 or 1099s.”

Business owners and the self-employed with complicated returns may be more likely than others to get an audit. So are those who make mistakes.

“About one percent of all returns are audited every year," says Eric Smith of the IRS.

“If we do ask you a question about what's on your return – if you have good records and show that ‘Yup, that item of deduction or credit is perfectly proper,’ then we're going to say ‘Hey, no problem.’"

One of the major hassles of getting an audit? It’s time consuming.

Copyright 2011 ABC News Radio

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