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What Are Your Chances Of Being Audited This Year?

by Neal Frankle, CFP ®, The article represents the author's opinion. This post may contain affiliate links. Please read our disclosure for more info.

Are you concerned about an IRS audit? Thanks to government cut backs you may have less to worry about than you think. The IRS’s budget has been slashed $1 billion since 2010 and over that time they’ve let 10,000 workers go. ? In 2014 alone funding for the IRS is down over $500 million compared to 2013.

That may be bad news for the bureaucrats but good news for taxpayers. According to the IRS, audits are down 5% to levels not seen since 2008. And most of the audits that do take place are taking place by mail (to save even more money). These audits by mail are far less intrusive because they typically focus on line items rather than your entire tax return.

This is not to say that there isn’t anybody left in the hen house to watch the chickens. If you haul in the big bucks, the IRS still has you in their sites. Almost one in ten people who earned between $1 million and $5 million last year were audited. And if you earn more than that, your chances of getting a visit from the IRS go up astronomically. One in four people who earn over $10 million are audited each year.

But don’t let your guard down just because you don’t earn millions and fly around in Lear jets. You can still get audited pretty easily. That’s right. If you are a business owner, claim a home office deduction, claim the Earned Income Tax Credit or don’t report a foreign bank account, your odds of being audited go up fast.

Bottom line? Be honest. Take advantage of tax reduction strategies but always report accurately. Don’t get sloppy with your return friend. And whatever you do, don’t wait to start thinking about it at tax time.  You have to get your house in order now before this becomes a problem.

If you are unlucky enough to fall under the IRS’s microscope you could be in for a world of pain – even if you haven’t done anything wrong. That’s why I’m a big fan of being scrupulously transparent with my tax return.

Are you changing the way you prepare your tax return now that you know the IRS is shorthanded?

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Who is Neal Frankle

Neal Frankle

I'm a CERTIFIED FINANCIAL PLANNER™ Professional with more than 25 years of experience. I feel very blessed and hope to share my personal financial experience and professional wisdom with readers of WealthPilgrim.
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Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement.  We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement. We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

YouTube Video UCoU0buhwVplzXrsyf342nOg

Retirement Crusaders

June 10, 2022 1:19 PM

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Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement.  We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement. We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

YouTube Video UCoU0buhwVplzXrsyf342nOg

Retirement Crusaders

June 10, 2022 1:19 PM

Subscribe
This error message is only visible to WordPress admins

Error 403: Requests from referer are blocked..

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