Continued from Avoiding an IRS Audit: 8 IRS “Red Flags” To Be Watchful Of.
Business Car Use
When claiming how much you drove you car for work, the best solution is to use the IRS’s standard mileage rate of $.55 a mile. If you decide to calculate the mileage yourself, be aware that the IRS could ask you for records of all your work-related mileage. Also, you may have to account for every trip made during the tax year in question.

Home Office Deductions
Home office deductions are available for a percentage of your mortgage, utilities, phone bills, insurance and maintenance costs allocated to home space used “exclusively and regularly” for conducting business. If you use the bedroom computer for checking your work-related emails, or writing an occasional proposal, you might get into trouble claiming that area as an office.

High Amount of Itemized Deduction for your Income
It’s wise to be aware of the proportions compared to your income that you claim. If your income is $95, 000, don’t try to tell the IRS that you gave $19,000 to your alumni association or church. IRS computers search through returns to ensure any claims within them fall into an acceptable range. If they find something, a person will take up the return and check everything on it thoroughly. For income ranges ranging from $100,000 to $200,000, the average charitable contribution is $3,790.

Non-Cash Charitable Donations
Personal property worth over $500 that you donate to charitable organizations must be accompanied by a Form 8283. Just the existence of that form with your return is a red flag in itself. Again, to stay out of trouble, be sure to have any and all supporting documents. That means an itemized receipt, with everything included on it that you are claiming, which is generated by the receiving agency. If you write the items in yourself, be sure to have the document signed by someone representing the charity.

More tips on how to avoid triggering an IRS audit will follow in “Dodging IRS Audits, Part 3“

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Disclaimer: The information contained in this article is in no way intended for use as legal tax advice. No assumption should be made that a tax attorney, enrolled agent or former IRS employee was involved in the creation of any content herein. Advice on personal or business tax matters can be obtained by contacting Advanced Tax Help at (800) 970-8704, or by logging on to www.advancedtaxhelp.com