Man filing taxes

3 Common Tax Filing Mistakes That Could Trigger an Audit

February 10, 2023
Alissa Hansen

By Alissa Hansen
Director of Trust Operations & Tax

Tax season is here, and that means it’s time to pay attention to the details. Why? Well, mainly so you don’t get audited.

The good news here is that many audits are triggered by honest mistakes that are easy to avoid. In this article we'll cover three of the most common tax filing mistakes to steer clear of, because they raise red flags at the IRS.

Not Reporting Your Total Income

One of the key ways to avoid an audit from the IRS is to make certain you’re reporting all of your income. Yes, every penny. That means any freelance jobs, side hustles, whatever. If you earn more than $600 a year from a job, that company should issue you a 1099 form. However, even if they don’t issue you one of those forms, you still need to report the earnings. You also need to report any earned interest from a non-IRA or 401(k) savings account.

Helpful tip: For a cheat sheet on what documents you need to file your taxes successfully, check out our Tax Filing Checklist.

Using Round Numbers

When it comes to filing proper tax forms that won’t trigger an audit, the dirt is in the details. That means when you’re taking deductions, do NOT use round numbers as estimates. You want to list the exact amount. For example, if you file for a $5,000 medical expense deduction, that could bring unwanted IRS attention. Round numbers rarely happen, and the IRS knows that. It’s much better to just file for the $4,957 deduction instead.

Helpful tip: Use online and mobile banking for a complete, accurate list of your transaction history right at your fingertips.

Claiming Your Car for Business Use

If you use a car for work purposes, you can claim a deduction for its cost. However, you will probably want to avoid claiming that the vehicle is used 100 percent for work purposes. While that could theoretically be the case, chances are you use that car for non-work purposes (at least sometimes). If you do claim your vehicle entirely as “business only,” make sure this is actually the case — or you could ring the alarm bells at the IRS.

Helpful tip: If you're still feeling overwhelmed or intimidated by filing your taxes, check out our easy crash course on Taxes: The Basics — part of our free Financial Learning Center.

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IMPORTANT NOTE: This article is for information purposes only, and Security National Bank is not a tax adviser company. There may be additional guidelines and information, regarding your personal tax situation, not included in this article. For more information, you should always contact your tax adviser or visit the IRS website.

About the Author

Alissa Hansen

Alissa Hansen is Director of Trust Operations & Tax in the Wealth Management Department at Security National Bank. A Certified Public Accountant (CPA), she has more than a decade of public accounting experience.