It’s every taxpayer’s worst nightmare – an audit. Sure, big corporations and billionaires with off-shore bank accounts can expect some extra attention from the IRS. But what about personal finance bloggers who spend their days dishing advice on sound financial decisions – there’s no way they could have made some mistakes, right? Wrong.
J.D. Roth founded the popular personal finance blog Get Rich Slowly and created a year-long course of how to achieve financial independence. This is not the type of guy you’d think would get audited – and certainly not someone who made mistakes when filing his taxes. But he did.
Last year, Roth returned from vacation to find an unwelcome letter in the mail. He was being audited for his 2011 taxes. He wrote about the experience in a blog post titled “I was audited by the IRS!”
“In the end it came back that I didn’t owe any money and the IRS didn’t owe me any money – this is called is a no change result,” Roth said in an interview with Yahoo Finance. “The only person who made any money off the process was my accountant who made $1,500 for coaching me through.”
But Roth had made a few mistakes, like not reporting the interest income on a personal loan and paying for some business expenses out of his personal account.
The odds of getting audited are extremely low. This year, less than 1% of taxpayers will have their returns audited, according to the Associated Press.
If you’re still worried, here’s some information about some common red flags that can catch the IRS’s attention.
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