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Are you an ‘average’ taxpayer? That’s a good thing

by on
in Centerpiece,Small Business Tax,Small Business Tax Deduction Strategies

Although you may be an extraordinary person, sometimes it pays to be just “average.” Take your federal income tax return, for example.

Alert: If your deductions line up close to the average for taxpayers in your income category, you’re more likely to fly under the IRS’ radar. Conversely, if the deduction amounts are disproportionately higher than the average taxpayers in your group, it could set off alarms.

The charts below, derived from the Winter 2013 Statistics of Income (SOI) Bulletin and based on data from 2011 returns, provides valuable guidelines based on different levels of adjusted gross income (AGI).

Does this mean you’ll be audited if your deductions exceed the average amount? Not at all. Nor should you shy away from taking legitimate deductions even if they are disproportionately high for your income group. However, if you’re above the average, make sure you have the proof needed to support your claims.

Tip: The IRS also matches returns with other forms, like 1099s, to select individual audit targets.

 

 

 

 

 

 

 

 

 

* Only includes deductions by taxpayers with medical expenses exceeding 7.5% of AGI.
** Only includes deductions by taxpayers with casualty and theft losses exceeding 10% of AGI and miscellaneous expenses exceeding 2% of AGI.

 

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