The only thing that’s good about tax time to me is when it’s over. I’ve had surgeries less painful than analyzing my total annual tax liability. Especially when factoring in local taxes, which by the way is a good exercise for everyone to do. Most people are clueless as to what they’re really paying in taxes. And as an aside, if you look forward to Tax Day year after year because of a refund, that’s not a good thing either. You probably aren’t managing your withholding well and are simply providing an interest-free loan to the federal government year after year. It is something you should seek to fix. Anyway, this is about the likelihood of Uncle Sam to come knocking after all of the blood has been shed.
The IRS is out with their audit figures from 2019 and the scorecard says that the odds of being audited are 0.45% or less than 1 in 200. It’s the eighth straight year of declines. You’ll be happy to know that your odds of being audited are now at record lows. As always, the more you earn the more likely you are to get cozy with the IRS. While overall rates are under half of one percent, the odds jump dramatically for those earning $500,000 or more. The audit rate rises as high as 6.7% for millionaire earners. Integrity is always best, no matter how painful it might be. Here’s to hoping 2020 is audit free.