Preparing taxes can be a big hassle; even bigger is when you get selected for an audit. If you are preparing your taxes yourself you better know what you are doing, otherwise you may end up paying a huge penalty.

Step # 1

Keep all receipts for at least 3 years. Did you know you may be audited for taxes you filed 3 years back? Anything above the value of $70 that you are claiming for deductions needs a proof of purchase if audited.

Step # 2

Do not make gestimations while entering your deductions. Be specific with what you are adding and better have proofs of your purchases that you are claiming as your deductions

Step # 3

If your deductions are genuinely big then pamper all your receipts. You are at higher risk for being called.

Step # 4

Avoid using free tax filing software if you are claiming large deductions. Use paid softw

ares such as TurboTax. It gives you better deductions plus asks questions in a very simplified manner while filling out the tax forms for you. Always click on the "Help" button when in doubt. Do not take chances.

Step # 5

Sign up for "audit defense" to be on the safe side.

Step # 6

Make sure you compare your numbers with the national average. Turbo Tax gives you an excellent comparison. If you see abnormally high figures, re-evaluate your entire application. You may have entered a deduction amount twice under two different headings.

Step # 7

Finally, you can still be audited even if you did everything perfect. Some call it the "audit lottery," which occurs when the IRS computers randomly select set of people for audit. This is done to ensure that those people who are not audited are playing a fair game. They cannot audit all but they do some sampling here. You may only pray that you not be the luckiest one in this case.

Tags & Keywords : irs