Five things to watch out for in your tax return that could trigger an IRS audit - and how YOU can avoid them

With just over a month until the filing deadline, some Americans may be growing concerned about tax audits. 

While the majority of tax returns are accepted, some face closer examination from the Internal Revenue Service (IRS). This is to check whether income, expenses, credits and deductions have been reported correctly. 

While the agency does choose some returns at random, it will mainly only audit returns with inconsistencies or errors - and some issues are more prone to IRS scrutiny than others. 

During the 2022 fiscal year, the IRS closed 708,309 audits, assessing almost $30.2 billion in additional taxes. 

Here are five things to look out for to ensure that your return does not trigger an audit. 

Some returns will face closer scrutiny from the IRS to check whether income, expenses, credits and deductions have been reported correctly

Missing income

For many taxpayers, missing income is easy for the IRS to spot due to its 'automated underreporter' program.

The agency compares the returns it receives with documents from employers or financial institutions - such as W-2s - and checks that the information matches. 

While recent IRS enforcement has targeted high-income individuals, everyday filers could still face an audit if income streams are missed off a return. 

Mark Steber, chief tax information officer at Jackson Hewitt, told CNBC that 'mismatched data' is the number one thing that gets taxpayers into trouble.

'If you leave stuff off [your return], that could get a question,' he said. 

And understating income could lead to a substantial penalty of 20 percent of the underpayment of taxes. 

Math mistakes 

Another of the biggest IRS red flags is math errors on a return. 

In the fiscal year 2022, the agency issued close to 16 million math error notices, The Washington Post reported. 

The most common error involved the pandemic-era recovery rebate credit - which was found on almost 12 million returns. 

Next was the child tax credit, which prompted over 4 million math errors on individual returns. 

Other math errors included incorrect calculations of taxable income and miscalculations of the earned income tax credit and education credits. 

A small math error on its own may not necessarily trigger an audit, but if your return is selected for a manual review, it might raise other issues, experts warn.

During the 2022 fiscal year, the IRS closed 708,309 audits, assessing almost $30.2 billion in additional taxes (Pictured: IRS Commissioner Danny Werfel)

Unusual tax breaks

Excessive tax deductions compared to what is expected for your income level could also be a red flag for the IRS. 

Ryan Losi, executive vice president of CPA firm Piascik, warns that if your adjusted gross income is around $100,000, but you are claiming itemized deductions similar to filers who have a million-dollar income, that will raise eyebrows. 

'You need detailed substantiation,' because if you cannot prove you qualify for a tax break during an audit, you could lose the deduction, he told CNBC.

He also recommends using actual expenses rather than estimated amounts for tax breaks. 

When claiming four-or-five digit deductions, it is 'very unlikely' your expenses will be round numbers, he added.

Overstating business deductions 

'A common misconception is that you can write off the full cost of a vacation by just conducting a minor piece of business, or deduct the full cost of a car with only rare or occasional business use,' IRS spokesperson Eric Smith told The Washington Post.

'Neither of these is true.' 

According to the agency, in order for a business expense to be deductible, it must be 'both ordinary and necessary.'

An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business, trade, or profession, it says.

Small business losses

If you own a business, make sure you speak to a tax professional and read the IRS tax guide for small businesses. 

If the agency questions whether you have a profit-making company, or the business is in fact more like a hobby, you may run into some issues. 

The guide reads: 'If you do not carry on your business to make a profit, there is a limit on the deductions you can take.

'You cannot use a loss from the activity to offset other income.'