You audit odds are the lowest in years... What's changed over the past year
Bottom Line: Here's something we can all agree with... No one wants to be audited. The good news for you, at least based on what happened last year, is that your likelihood of having to go through process hasn't been lower since 2002. According to the latest from the IRS...
1 in 160 were audited last year
The biggest decrease in audits occurred with high income households (where audits were highest)
Your odds of being audited are still higher with higher reported income
Business audits also declined
It's long been true that the higher your taxable income is, the higher your audit odds are... That was still the case over the past year but there were significant changes for individuals and businesses alike. For the average person your odds of being audited were just .6%. The lowest in fifteen years and down from a peak of 1.1%. Notably those making over $1 million per year saw the biggest decrease.
4.4% of those earning over $1 million were audited (still seven times higher than the overall average) but that was down from a peak of 9.6% two years ago. Businesses are also much less likely to see the tax man too as just .4% of businesses were audited compared to .7% in recent years. Of course, what you care most about at this point is what's happening this year and while we won't have a complete picture until about a year from now - there's no reason to believe your odds would significantly increase based on current staffing and perceived priorities at the IRS (stopping tax filing fraud first, tax cheaters second).
Here's something we can all agree with... No one wants to be audited. The good news for you, at least based on what happened last year, is that your likelihood of having to go through process hasn't been lower since 2002. According to the latest from the IRS...
1 in 160 were audited last year
The biggest decrease in audits occurred with high income households (where audits were highest)
Your odds of being audited are still higher with higher reported income
Business audits also declined
It's long been true that the higher your taxable income is, the higher your audit odds are... That was still the case over the past year but there were significant changes for individuals and businesses alike. For the average person your odds of being audited were just .6%. The lowest in fifteen years and down from a peak of 1.1%. Notably those making over $1 million per year saw the biggest decrease.
4.4% of those earning over $1 million were audited (still seven times higher than the overall average) but that was down from a peak of 9.6% two years ago. Businesses are also much less likely to see the tax man too as just .4% of businesses were audited compared to .7% in recent years. Of course, what you care most about at this point is what's happening this year and while we won't have a complete picture until about a year from now - there's no reason to believe your odds would significantly increase based on current staffing and perceived priorities at the IRS (stopping tax filing fraud first, tax cheaters second).