2. Excessive Deductions
According to Reams of TaxBuzz, excessive deductions will quite often trigger audits, particularly those that appear out of line or above the norm for an individual’s income bracket. These frequently occur under the medical expenses tax deduction, charitable contribution deduction, or even gambling loss deductions.
Some medical expenses, for instance, are partly tax-deductible. Under the current tax law, taxpayers are allowed to deduct qualified unreimbursed medical expenses that are above and beyond 7.5% of one’s adjusted gross income.
But it’s advisable that you proceed with caution when applying too many deductions. Similarly, the IRS allows a deduction for money and property contributions made to qualified charitable organizations. You’ll want to make sure that the contributions being claimed are reasonable and not out of the norm with your previous tax filing history.
