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Nothing strikes fear in the hearts of Americans like a letter from the IRS announcing that you’re being audited. Your chances of being audited are actually quite low. Still, it’s prudent to reduce the risk as much as possible. We’ll discuss how to do that today on MoneyWise. You might be relieved to know that your odds of getting that audit letter from the IRS are just 1 in 333. But you can take steps to make it even less likely. Conversely, if you trigger any red flags with the IRS, your chances of an audit can go up significantly. TIPS TO REDUCE YOUR RISK OF AN IRS AUDIT 1. AVOID MATH MISTAKES:Be sure to double and triple check the amounts you enter and the various totals and subtotals to avoid mistakes. A math error could also end up costing you money if you make it in the IRS’s favor. This is where using tax software can be very helpful. 2. MAKE SURE YOU REPORT ALL INCOME:Let’s say you’re employed somewhere and you get the standard W-2 form. But you also made money on the side. If it was more than $600 dollars, whoever paid you has to report it on a Form 1099. You can’t ignore the copy of the 1099 you get in the mail. The IRS already knows about that income and not reporting it can get you audited, or worse. 3. DON’T CLAIM TOO MUCH IN CHARITABLE DONATIONS:This happens less often these days because the standard deduction was roughly doubled a few years back. But be careful not to claim too much in the way of charitable donations. You might be tempted to do that as a way to get above the threshold of the standard deduction, but don’t try to deduct anything you’re not entitled to. And always make sure to keep the proper paperwork to document your donations. 4. DON’T CLAIM EXCESSIVE BUSINESS LOSSES:If you’re self-employed keep your chances of an audit down by not claiming excessive losses on your Schedule C. This usually involves claiming personal expenses as business expenses. Of course, it’s possible to claim something you’re not entitled to in error, so if you have doubts about whether something is a legitimate business expense IRS Publication 535 can clear them up for you. 5. MAKE SURE YOU’RE ENTITLED TO HOME OFFICE DEDUCTION:Before you claim a home office deduction, make sure you’re legitimately entitled to it. You have a right to a home office deduction if you’re self-employed, or your employer doesn’t provide you with regular office space. However, you must use that space exclusively and regularly for your business. The square footage of the space, compared to your entire house, will give you a formula for claiming a portion of other expenses like utilities. If you meet those qualifications, you shouldn’t have any trouble claiming a home office deduction, even if you are audited. 6. BE CAREFUL ABOUT ROUNDING NUMBERS:Next, be careful with rounding off numbers. It’s acceptable to round off to the nearest dollar. But if you’re always rounding off to the nearest 10 or 100, you’re just making it too easy for the IRS. Their computers will spit that out every time. WHAT IF YOU DO GET AUDITED? What happens if you are audited? Make sure to save all of the necessary receipts and documents to backup whatever you’ve claimed on your return. It just may help you get through an audit relatively unscathed. A very high percentage of audits are actually done by letter alone. If you get a letter asking for receipts or more information about a particular deduction, make copies of those materials and respond promptly. You may not even have to sit down with an IRS examiner. And remember, Christians are to be scrupulously honest in all their affairs,including paying taxes. Romans 13:6-7 reads, For because of this you also pay taxes, for the authorities are ministers of God, attending to this very thing. Pay to all what is owed to them: taxes to whom taxes are owed LISTENER QUESTIONS On today’s program, Rob also answers listener questions: ●Is it better for your credit rating to leave unused credit accounts open or close them out? ●How do you determine whether it’s best to surrender an annuity? ●Is it biblical to give your tithe to cultural or political causes aligned with your faith, rather than to a church? ●Are stock options with your employer a good investment? ●When receiving a lump sum of cash, is it smarter to pay down your mortgage or auto loans? Remember, you can call in to ask your questions most days at (800) 525-7000 or email them toQuestions@MoneyWise.org. Also, visit our website atMoneyWise.orgwhere you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app. Like and Follow us on Facebook atMoneyWise Mediafor videos and the very latest discussion!Remember that it’s your prayerful and financial support that keeps MoneyWise on the air. Help us continue this outreach by clicking theDonate tab on our websiteor in our app. To support this ministry financially, visit: https://www.oneplace.com/donate/1085/29