Your tax return could be flagged by the IRS. Here’s when it may happen

Your tax return could be flagged by the IRS. Here's when it may happen  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  VIEW IN BROWSER | SUBSCRIBE WED, FEB 17, 2021 YOUR WEALTH Editor's Note The very idea of an IRS tax audit can strike fear into your heart. While nobody wants to face an audit, the good news is that the IRS only audits a very small number of tax returns. With that said, CNBC reporter Sarah O'Brien details some common things taxpayers need to be aware of that could actually prompt the IRS to look more closely at your tax return. Topping the list is unreported income. One sure-fire way for your tax return to grab the attention of the IRS is a discrepancy between the income you report and the information that the agency has. Another red flag is charitable donations. If you itemize deductions, and those write-offs include donations, be aware that the IRS knows how much taxpayers at various income levels typically donate. So if your charitable-contribution deduction is high relative to your income or in comparison to your income peers, look out, Sarah reports. Something that also gets the attention of the IRS is if someone claims too many business expenses. Also be careful when taking that home office deduction. If you operate a business, the IRS allows you to deduct legitimate expenses against your income. And if you use a portion of your home exclusively for work, you can take the home office deduction. Sarah points out that full-time workers who are telecommuting do not get that tax break. The bottom line: We may all complain about paying taxes, but when push comes to shove, you should never try to cheat the IRS. It can never end well. For more key stuff like this, please follow me on Twitter @jimpavia and check out CNBC's Financial Advisor Hub and CNBC + Acorns Invest in You: Ready. Set. Grow. Jim Pavia @JIMPAVIA Your tax return could be flagged by the IRS. Here's when it may happen Filing a 2020 tax return may be confusing due to things like stimulus checks — which may mean more mistakes and a greater chance of hearing from the IRS. This tax pitfall could affect millions due to Covid. Here's what you need to know If you received unemployment benefits last year, expect a bit of complexity when you file your 2020 taxes this spring. Biden extends protections for homeowners. Here's what you need to know Struggling homeowners received some welcome news on Tuesday, with the Biden administration announcing it will extend forbearance and foreclosure relief. A new child tax credit expansion could provide monthly income. Some question whether the help is too much or too little Direct payments are a big part of the $1.9 trillion coronavirus relief plan, especially for parents. Some leaders question how generous they need to be. The only reason to be bearish is there's no reason to be bearish, Bank of America says A Bank of America survey showed investors are so optimistic about the market outlook that they are dumping cash to take part in the latest run to record levels. Why the 401(k) won't fix the U.S. retirement crisis About half of American workers don't have an employer sponsored 401(k) plan. Here's who gets left behind, contributing to the U.S. retirement crisis. In addition to Covid relief measures, President Biden has long-term plans to bring back jobs President Joe Biden made several promises on the campaign trail to add jobs back into the economy. The question is what he can ultimately accomplish. Fed's Bullard doesn't see asset bubble and doubts policy will tighten soon Bullard told CNBC that there aren't clear signs of excesses, though he conceded that stocks are "highly valued on the whole." The best defense is a good offense … lately "Hypothetical scenario – you want to play all offense with your stock portfolio, i.e. own the hottest stocks with the most potential upside, but use the rest of your portfolio to play the strongest defense possible ..." CONTRIBUTORS Sharon Epperson @sharon_epperson Josh Brown @ReformedBroker Unsubscribe Manage Newsletters Terms of Service Join the CNBC Panel   Digital Products Feedback Privacy Policy CNBC Events   © 2021 CNBC LLC. All rights reserved. A property of NBCUniversal. 900 Sylvan Avenue, Englewood Cliffs, NJ 07632 Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis. Data also provided by THOMSON REUTERS