Some Great Tips To Help You Avoid A Tax Audit

Tax audits are what the CRA does to check out the accuracy of your income and deductions. That’s why it’s always a great idea to ensure that your taxes are accurately and honestly filed. It’s never a good idea to be dishonest to the IRS or very careless with your taxes, because it’s very likely that you will be caught or your errors will be recognized and you may be penalized.

Here are some of the ways you can avoid receiving a tax audit from the Canadian Revenue Agency.

You need to report ALL of your income to the CRA. Never try to conceal or omit different aspects of your income, because they already have information about it. Keep accurate records, report all of your cash and report any miscellaneous income you receive as well.

You need to claim your dependents properly. Educate yourself on the rules for who you can or can’t claim as a dependent. For instance, two people should not be claiming the same person as a dependent, because that attracts the attention of the CRA.

You need to make sure your math is right, because math errors are typically something that attracts the attention of the CRA. Unfortunately, most people tend to incorrectly add their income from their W-2.

You need to be aware of the rules for Home Office Deductions. You need to be careful with these or hire a professional tax accountant to help you with them, because they are often quite confusing and sometimes people tend to take advantage of them.

You need to cautiously approach meal and entertainment deductions. Ensure that your documentation is correctly in place and well-maintained when you want to claim tax deductions for your business meals, travel or entertainment.

You need to stick with deductions typical for your income level. Your chances of getting audited will be lower if you stick closer to your credits and deductions that are typical for your income bracket. Ensure that you have good documentation if you can legitimately claim a tax deduction, so that you don’t make the CRA suspicious.

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