WHILE PREPARATION CAN’T PREVENT ALL OF LIFE’S WHAT MIGHT GO WRONG IT MIGHT HELP TO PREPARE FOR AN EVENT AND HOW TO HANDLE IT IF IT ACTUALLY HAPPENS

Always try to have as little debt as possible. Pay off credit cards monthly.  Avoid as best as possible to have balances to carry forward.  Make sure you keep your fixed expenses, such as insurance premiums, mortgage payments or rent at a level you can manage for six months to a year with limited income such as unemployment insurance supplemented by savings.  A liquid emergency fund that can cover projected expenses are helpful.  Consider switching to a spouses health plan if possible.


The IRS Audits you.

Before it happens. Retain you returns and supporting documents for at least seven years.  For guidance go to irs.gov and search for IRS Publication 552.  Keep a note of a  tax deductible expenses such as mileage for business or charitable trips.  For charitable contributions, keep dated receipts for cash gifts of $250 or more and for non cash items you donate such as furniture and clothes. Donation worth more than $5,000 require a written appraisal.


If it happens –  Don’t panic.  Read audit notice carefully.  If it is something simple try working with the IRS directly. If it is more complex ask your tax preparer for guidance. If it is more serious and you have a tax preparer ask him or her to come along at the meeting time.