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Worried about an audit? What's the likelihood of an audit?

Every tax season, Americans feel the pressure as they fill out tax forms and hope they've done them correctly. The tax deadline is passed now, in May, but the Internal Revenue Service (IRS) still has the potential to complete audits.

People are almost too concerned about audits, though, because the likelihood of having one is slim. Out of the $149.9 million people filing tax returns for 216, only 933,785 were audited. That's only .6 percent.

The number of audits performed do vary based on a variety of factors, though. For instance, it's extremely unlikely to face an audit if you have an uncomplicated tax return. If you have less than $200,000 in total income, then you'll have an overall likelihood of an audit of around .2 percent.

The chance of an audit does go up with the complexity of a tax return. If you have rental income but no Earned Income Tax Credit, the rate is .7 percent. For returns with Earned Income Tax Credits, the rate is 1.4 percent. Overall, the likelihood is still very small, even if you are filing a business return (1.1 percent chance of an audit).

Your income makes a difference, too. If you make less than $500,000, your likelihood of an audit is around .5 to .7 percent. If you say you earn nothing, it's 2.55 percent. Comparatively, those who earn $10 million or more fall into a 14.52 percent category, making an audit much more likely.

If you're concerned, remember that audit defense is a possibility. Your attorney can help you protect yourself and give you more information on your rights during an audit.

Source: The Motley Fool, "How Likely Is a Tax Audit?," Matthew Frankel, accessed May 18, 2018

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