However, you can always reduce the likelihood of being singled out in the first place. Here are a few strategies to help you avoid tax audits.

Confirm your figures

One of the most common red flags for most auditors is usually erroneous data entry. However, this is one of the most preventable issues. It is always important that you double check your returns even though people tend to be extremely careless when it comes to cross-border taxes. Taxpayers tend to make avoidable mistakes by forgetting income or related forms they get when filing. It is best to wait for all your income reports, investment or bank statements, and other financial paperwork to arrive before you begin filing your returns for foreign tax credit.

Realistic deductions

Having unrealistic or unusual itemized deductions for small business owners or individuals can raise red flags for auditors. For instance, claiming to have a charitable tax deduction of 50% of your total income may raise eyebrows with the CRA or IRS. Working with cross-border accountants with experience in US tax return for foreigners will help you determine the tax deductions you are eligible for.

Be 100% Honest

When it comes to cross-border taxes, it is always good to be 100% truthful to lower the chances of getting a tax audit. You can keep audits at bay by reporting your income, credits, deductions, and other figures accurately and realistically. You should be prepared to look at the auditors in the eye and support all the numbers you have claimed on your foreign tax credit returns.

Although audits are rare, most people would wish to avoid them. The percentage of people that are audited tends to be quite small, however, this number keeps rising over time. If the IRS or CRA decides to audit you, there is nothing you can do to stop it. However, ensuring that you stay on the right side of these organizations when you relocate or open a company in US or Canada will reduce the likelihood of being singled out.

About Pioneer Professional Accountants

Pioneer Professional Accountants is a renowned tax accounting firm that specialized in Canada and USA taxes. The company’s success is attributed to their investment on innovation and years of experience in the industry. They are well equipped to provide practical solutions that are based on their rich experience and in-depth analysis in handling both direct and indirect taxation problems. They have well-trained and seasoned tax accountants who have the ability to plan and assist clients to achieve the best results on their cross border taxes. If you need assistance with USA Canada cross border taxes, consult Pioneer Professional Accountants.

Contact Information

Physical Address: 1243 Grand Marais Rd W, Windsor ON N9E 1E1
Email Address: [email protected]
Phone Number: 519-551-9299
Website: www.ppatax.com