Tis the Tax Season

With tax season in full swing, I thought Id share this article I came across on MSN.com. According to this piece, audits are on the rise. The IRS claims it audited 1.38 million taxpayers in 2007, up 7 percent from 1.29 million taxpayers in 2006.
 
Having never been audited, I can only imagine the stress and headache such an event entails. According to the article, the top reasons tax returns are flagged include sloppy returns and outrageousor at least unlikelydeductions. For example, a person who earns $50,000 a year and claims $10,000 in charitable contributions may seem suspicious.  The self-employed can also be easy targets, as are people who earn their paychecks through tips, such as servers or cabbies.

The article also offers tips on how to avoid an audit. First, get organized. I keep a file where I stash receipts throughout the year. This includes everything from doctors office visits to cash or clothing donations I make. While I admit Im not always the best at filing every scrap of paper, they generally all make it. Another tip: Plan ahead. So if, for example, you did make a large charitable donation or you paid more than the usual in medical expenses, be prepared to share that information.
 
For more on taxes, including a Q&A forum, check out MSNs home page on the subject.