The good news: The Internal Revenue Service (IRS) reportedly audits less than 1% of individual tax returns each year, according to the Congressional Research Service. The figure was just 0.29% for tax year 2019, the most recent year after the IRS's three-year statute of limitations for audits has expired.

“Most W-2 earners have very little on their returns that would subject them to audit, particularly since the 澳洲幸运5官方开奖结果体彩网:Tax Reform Act of 1986 (TRA) came into law,” says , a CPA located in Linwood, NJ. “There’s very little on the return that’s deductible under the TRA so the majority of people are taking the standard deduction and are done at that p🐟oint.ꦆ”

The IRS is nonetheless vigilant. A computer scans all incoming returns, looking for statistical red flags and data that just doesn’t make sense or match up with 澳洲幸运5官方开奖结果体彩网:Forms 1099 or W-2s they’ve received in your name. Some situations are more likely to shine a spotlight on your tax return than others.

1. You're Self-Employed

“The biggest chance of getting audited is typically for self-employed people,ꦦ” says Camp. “Quite a few business owners want to deduct absolutely everything and claim it as a business expense. Fido’s visit to the vet might be expensive, but it🏅’s not typically deductible unless you own a dog kennel.”

She indicates that automobile expenses tend to be wildly overstated, with little documentation to verify them. “I’ve seen returns audited only for that deduction because it’s ridiculous in its amount.”

This deduction is limited to only those miles you drive for 澳洲幸运5官方开奖结果体彩网:business purposes. You can claim a deduction for the miles you drive from your kennel to Fido’s veterinarian, but you ✱can’t include those associated with taking care of some personal business on your way home.

The 澳洲幸运5官方开奖结果体彩网:IRS mileage rate is 70 cents per mile in 2025 for business, up from 67 cents in 2024, so it can be a bit tempting to shave almost a dollar off your taxable income each time you get behind the wheel. It’s not a good idea to do so, however, unless you can prove that you were driving only for business purposes.

The 澳洲幸运5官方开奖结果体彩网:home office deduction is another nice tax break, but you can only claim the portion of your home-related expenses that’s equal to the square footage you use solely for business purposes. You might work from home at your dining room table, but you can’t claim the area for a home office deduction if you also eat meals there.

Claiming a large amount of square footage can trigger an audit. “A typical office-in-home deduction will be about 10% of the annual costs of running the home, but this will vary on square footage,” according to Camp.

2. You Have Other Sources of Income

The IRS expects you to report every dollar you take in from every source, not just those that result from working and employment. Think interest, dividends, 澳洲幸运5官方开奖结果体彩网:Social Security benefits, s൲ome retirement plan dis𓆉tributions, and profits from buying and selling cryptocurrency.

The IRS knows if you’ve received these payments because payers must report the transactions to the government on 1099 forms. You’ll receive one copy and the IRS will receive another. It will compare the information to what you report on your tax return.

As for 澳洲幸运5官方开奖结果体彩网:cryptocurrency, the IRS includes a cautionary note near the top of the 2024 Form 1040 tax return: “Did you: (a) receive (as a reward, award, or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?” You’re required to check yes or no.

“Caution should be taken that all income is disclosed, such as 澳洲幸运5官方开奖结果体彩网:unemployment, 澳洲幸运5官方开奖结果体彩网:Social Security, pensions, and 澳洲幸运5官方开奖结果体彩网:investment income,” says Camp. “Otherwise, you might as well send the IRS an engraved invitation to audit you.”

3. You're a High Earner

The IRS operates within a budget, too, and it’s statistically more likely to devote its budget dollars to situations in which it’s likely to collect some hefty tax dollars. Intuit reported in 2024 that approximately 4% of taxpayers who earned more than $200,000 were audited compared to 1% or so of those who earned less. It jumped to 12.5% for those with incomes of $1 million or more.

4. You Claimed Charitable Contributions

Claiming certain 澳洲幸运5官方开奖结果体彩网:tax deductions can trigger 𝐆an audit. The amount of your claimed deductions should correspond with your reported income. You will most likely not donate $15,000 to ꦐcharity if your yearly income is $30,000.

The IRS computer will almost certainly catch this, and the agency will want proof that you have parted with that much money. Save that receipt and your corresponding bank statements, and remember that your gift must be made to a 澳洲幸运5官方开奖结果体彩网:qualifying organization. Paying your out-of-work neighbor’s grocery bill this week isn’t deductible.

5. Those Refundable Tax Credits

There are tax credits and then there are tax credits. Most credits aren’t refundable. They subtract from what you owe the IRS but the government keeps any money that’s left over after your t✨ax obligation is erased. The IRS will send you a check oꦯr deposit to your designated bank account if you claim a refundable credit and some money is left over after eliminating what you owe.

Claiming a refundable tax credit will likely prompt the IRS to look more closely at your tax return. They include the Child Tax Credit, the American Opportunities Education Credit, and especially the Earned Income Tax Credit (EITC). The IRS has stated, “In FY 2023, 33.5% of EITC payments, amounting to $21.9 billion” and “96% of the total dollar amount of EITC audit adjustments was attributable to returns prepared by non-credentialed preparers."

“Audit adjustments” are the keywords here. The agency will keep a close eye on 2024 returns that claim this credit so as not to repeat the same error. Claiming the EITC is also subject to many complicated rules, so you might want to check with a qualified tax professional before claiming it to ensure you meet them all.

The Bottom Line

Not every audit involves a platoon of IRS agents ringing your doorbell. The majority are correspondence audits. The IRS indicates that it will firstܫ contact you by mail if you’ve filed a questionable 🉐return.

You’ll most likely receive an IRS Notice CP2000 advising you that the agency wants to “adjust your income, payments, credits, and/or deductions.” You’ll clarify the issue by sending the documentation you’ve saved, and hopefully, that will be the case. The 澳洲幸运5官方开奖结果体彩网:Internal Revenue Code requires that you keep your supporting documents for at least three years after the filing date of your return just in case.

You can avoid landing in the correspondence audit pile by double-checking your 澳洲幸运5官方开奖结果体彩网:tax return before submitting it, not just for erroneous reporting but numerical goofs such as transposing numbers or entering a decimal where it doesn’t belong. And always keep your personal expenses out of the mix if you’re a self-employed 澳洲幸运5官方开奖结果体彩网:independent contractor, Camp advises.