April 15 has come and gone, which means the IRS is now deep into reviewing tax returns for the 2024 filing season. And if you’ve filed yours already, you might be wondering — what happens next?
For most, it’s smooth sailing. But for others, especially those with inconsistent or unusual claims, the IRS may take a closer look. This process is known as a tax audit — and it’s something you definitely want to avoid.
Contents
- 1 Why Is the IRS Auditing People?
- 2 Who’s Most Likely to Be Audited?
- 3 Common Audit Triggers
- 4 Table: Groups at Higher Risk of IRS Audits
- 5 How IRS Audits Work
- 6 What Expenses Are Deductible — And What’s Not?
- 7 Table: Examples of Deductible vs. Non-Deductible Expenses
- 8 Avoiding IRS Trouble: What You Can Do
Why Is the IRS Auditing People?
Every year, the IRS runs checks to make sure taxpayers are playing by the rules. If your return stands out for the wrong reasons — like inflated deductions or sketchy expenses — it might trigger a red flag.
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That doesn’t mean you’ve done something wrong, but it does mean the IRS may ask for proof before sending your refund. Their goal is simple: make sure people aren’t abusing the system.
Who’s Most Likely to Be Audited?
While anyone can be audited, certain groups are more likely to be looked at:
- Self-employed individuals
- Freelancers and gig workers
- Small business owners
- People claiming large deductions or losses
The IRS especially watches for:
- Home office deductions that seem too high
- Unusual expense categories that don’t match your income
- Large business write-offs that aren’t typical for your industry
If the math doesn’t add up or the claims look suspicious, expect the IRS to follow up.
Common Audit Triggers
Here are a few things that can make the IRS take a second look:
- Reporting very low income with high expenses
- Claiming the home office deduction without a dedicated space
- Writing off personal expenses as business-related
- Not matching 1099 forms with reported income
- Inconsistencies between state and federal returns
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The more out of place something seems, the more likely it is to attract attention.
Table: Groups at Higher Risk of IRS Audits
| Category | Why They’re Flagged |
|---|---|
| Freelancers/Self-employed | Often deduct business expenses heavily |
| High earners | Higher income = higher scrutiny |
| Claiming home offices | Easy to exaggerate or misreport |
| Large deductions | Especially if they don’t match industry norms |
| Previously audited | IRS may follow up more closely in future years |
How IRS Audits Work
If your return is flagged, the IRS doesn’t just show up at your door. Here’s how it typically plays out:
- You get a formal letter — not an email, not a phone call. It’s all official mail.
- The letter outlines the audit type — it could be mail-based (correspondence) or in-person.
- You’ll be asked to provide documents — proof for deductions, income, business costs, etc.
- You respond with documentation — and the IRS reviews it to confirm or adjust your return.
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If you don’t respond or can’t prove your claims, the IRS can make changes to your return — and you might owe more, including penalties.
What Expenses Are Deductible — And What’s Not?
Knowing what counts as a real business expense is the difference between a clean return and one that invites an audit.
Deductible Expenses (If Business-Related):
- Office supplies and equipment
- Software or tools for your work
- Home office (if used only for business)
- Travel costs for meetings or work events
- Marketing or advertising costs
Not Deductible:
- Personal meals or entertainment
- Daily clothing (unless it’s safety gear or a uniform)
- Hobby-related expenses
- Commuting costs to and from a regular office
Just because something helps you work better doesn’t mean it’s deductible — it has to be directly related to business and meet IRS standards.
Table: Examples of Deductible vs. Non-Deductible Expenses
| Deductible | Not Deductible |
|---|---|
| Laptop used only for freelance work | New TV “for productivity” at home |
| Travel to a client meeting | Vacation expenses, even with some work |
| Uniform for job site | Regular clothing, even if worn for work |
| Office supplies (pens, paper, ink) | Home decor or non-work items |
Avoiding IRS Trouble: What You Can Do
To keep things clean and avoid getting audited:
- Be honest — Don’t claim what you can’t justify
- Keep records — Save receipts, invoices, and mileage logs
- Understand the rules — Know what you can deduct and what’s off-limits
- Don’t push the limits — If something feels like a stretch, it probably is
- Work with a tax professional — Especially if your finances are complicated
The best way to stay safe is to only claim what’s legit — and be ready to prove it if asked.
A tax audit doesn’t mean you’re in trouble. But if you’re self-employed or claiming a lot of deductions, you’re automatically in a group that the IRS watches more closely. File carefully, stay organized, and don’t claim anything you can’t back up — and you’ll be in the clear.
FAQs:
How will I know if I’m being audited?
You’ll receive a formal letter from the IRS. They do not call or email about audits.
Can I claim my home office if I work remotely?
Only if it’s a dedicated space used exclusively for work — not your kitchen table or shared space
What happens if I ignore the audit letter?
The IRS can adjust your return without your input and apply penalties.
