4 Ways to Lower Your Audit Risk

4 Ways You Could Be Unknowingly Raising Your Audit Risk

Do you have an audit requirement for your small to medium sized business? Our Calgary tax accountants have vast knowledge and experience in audit assistance and can help make the process as smooth and efficient as possible.

No one wants to get audited, but audits are an important part of the CRA’s range of activities aimed at making sure the tax system is fair for everyone. During an audit, the CRA will closely examine the books and records of a taxpayer to confirm whether they are:

Fulfilling their tax obligations
Following tax laws correctly
Receiving the benefits and refunds to which they are entitled

The important thing to remember is that an audit can easily be minimized if you get the assistance and counsel of a tax accountant all year round. Think of such a professional as a long-term partner who is invested in your business and cares to keep it fiscally sound.

Our Calgary Tax Accountants Offer Comprehensive Audit Assistance

AT IAPC, we offer high quality, tailored, expert, and timely auditing services to make the process as smooth and hassle-free as possible for our clients. We have a highly dedicated team who use a streamlined audit process effectively to ensure that you enjoy savings, while also ensuring that you’re protected from compliance risks.

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AUDIT ASSISTANCE IN CHESTERMERE

Tax Audit Risk: 4 Ways You’re Unknowingly Raising Your Chances of Being Audited

Statistically speaking, your chances of getting audited are pretty low, as less than 1% of all returns land on the CRA’s list each year. That said, when you’re preparing your tax return, you could end up unknowingly making some moves that increase your audit risk.

Here are some things you should avoid doing to lower your risk of a tax audit:

1. Rushing Through Your Taxes

A lot of people end up filing their taxes at the very last minute, whether they’re waiting for key information, or they’re simply procrastinating. Whatever the reason, rushing the process is a good way to inadvertently increase your audit risk because in doing so, you’re more likely to omit key information or enter the wrong data.

What you should do: Start tackling your tax return a minimum of one month prior to the deadline so you don’t have to rush.

2. Filing on Paper

If you’re the old school type, you may decide to file your taxes on paper this year rather than do so electronically. However, filing on paper means that you’re much more likely to make a mistake, and if that happens, your return could land on that audit list.

Consider this: We are all human and subject to the occasional blunder. But if that slip up results in an CRA audit, you’ll be kicking yourself for not doing everything possible to lower your risk.

3. Guessing Numbers

If there is one thing the CRA wants, it’s accuracy. So as you sit down to do your taxes, make sure you’re dealing with hard numbers. Guessing at data or deductions is a sure-fire way to raise your audit risk, and it doesn’t matter if you’re reasonably close – the CRA wants those numbers exact.

Remember, every time you get a T4A, the CRA receives a copy as well and if your return doesn’t match its records precisely, you’ll automatically boost your audit risk.

4. Being Careless With Deductions

The CRA offers a host of deductions that, if you’re itemizing, could lower your tax burden significantly. However, proceed with caution when claiming these deductions because if you don’t, the CRA might choose to take a closer look at your return.

One main thing you should avoid is rounding numbers, unless your deductions actually happened that way. For example, if you have $5,977 in medical expenses, don’t claim $6,000 for convenience purposes. Not only is this technically a lie, but having too clean a number is likely to raise an eyebrow.

Need Audit Assistance? Our Calgary Tax Accountants Can Help!

Do you need advice on how to avoid an audit? Do you have an audit requirement for your small business, non-profit organization, or corporation? We can help make the process of auditing as smooth, quick, and efficient as possible.

To find out more about our tax services, and how we can take this responsibility off your shoulders so you can focus on other aspects of your business, contact us at 403-440-9200 or fill in our online contact form.

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