Deductions That Could Trigger An IRS Audit
March 28, 2012 by staff
Deductions That Could Trigger An IRS Audit, Every tax-filing season, the great quest by filers is to find the most tax deductions. But there are some deductions you should steer clear of.
If you claim these wrong write-offs, you’ll deduct expenses that don’t meet Internal Revenue Service guidelines.
And that means you’ll end up spending time with a tax auditor and paying more in taxes, penalties and interest.
Bankrate doesn’t want that to happen to you, so we’ve put together this list of expenses you might be tempted to claim. Don’t you dare!
But don’t get too upset. We’ve also provided some related tax breaks that do pass IRS muster and will lower your tax bill.
The hazard policy you bought to cover damage from fires, tornadoes, hurricanes, winter storms and other disasters, as well as for more-routine mishaps, offers peace of mind. What it doesn’t provide is a tax deduction for the insurance premiums.
But if you meet some tax law guidelines, you can deduct private mortgage insurance, or PMI on your 2011 tax return. PMI is the insurance your lender requires you to buy if you don’t put down a big enough down payment. PMI premiums are deductible as an itemized expense (it goes on Schedule A with your mortgage interest claim) as long as the mortgage insurance policy was issued between 2007 and 2011.
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