What really increases your chances of a tax audit?

Ever wonder what really increases your chances of a tax audit? It’s not just about the numbers it’s about how those numbers look to the IRS.

Here’s something many entrepreneurs and freelancers overlook:

The IRS doesn’t just look at your return in a vacuum. They compare you to others:

• People with similar income levels

• Businesses in your industry

• Taxpayers with similar lifestyles

If you’re taking advantage of obscure tax provisions (maybe stretching them a little too far), or you’re overly aggressive in how you apply deductions, you’re waving a flag.

And let’s talk about expenses:

If you dump all your expenses into one broad category—like “miscellaneous” or “business services”—instead of properly breaking them down (meals, travel, office supplies, etc.), you’re another step closer to that audit trigger.

The IRS is looking for patterns—and discrepancies. If something doesn’t fit the usual profile, your return gets more attention.

So how do you reduce audit risk while staying compliant?

1.Use the law—but don’t abuse it. Creative is fine. Questionable is not.

2.Benchmark your deductions. Are they in line with your industry?

3.Categorize expenses accurately. Vague is suspiciousClarity protects you.

4.Keep airtight documentation. If you can’t prove it, don’t deduct it.

5.Stay consistent across documents. What you tell the IRS should match what you tell your lender, your investor—or anyone else.

Tax strategy is a powerful tool, but with power comes scrutiny. Better to plan well than defend poorly.