Tax Terms You Need to Know - Audit

Video Transcript

 Hey, this is Chris with Money Burst. Since we're right in the middle of tax season, I decided to break down some of the common tax terms you're likely to come across as you're filing to hopefully help you feel a little more comfortable and confident as you file those tax returns. Today I want to talk about something called an audit.

Now this is definitely everyone's favorite term because, who doesn't love getting audited by the IRS? An audit is really just a review of your tax returns for accuracy, and you can be chosen to be audited just at random or it could be triggered by something that you put on your return that just looked really suspicious and they want to take a deeper look.

Now, this can be a nerve-wracking process but there's something you can do in particular to help you out in the event that you were ever audited - which I hope you never are. But the biggest thing you can do is just keep very detailed records. Make sure you keep copies of all your W2s, any receipts that you've used to claim deductions, and anything that went into preparing the tax return. Make sure you're keeping a copy for yourself, because with an audit they're going to be asking you a lot of questions. And asking you to provide proof because something looked off.

So, the best thing you can do to help yourself out in this situation, and help things go quickly and smoothly, is to be prepared and have those documents ready.