Tax season might seem far away now, but you’ll want to keep it in mind if you’re one of the unfortunate few that gets audited by the dedicated government organisation every year.
Tax audit insurance can give you peace of mind and protection against the substantial costs of being audited by the IRS in case you have made mistakes on your tax return, have failed to report income, or are unable to prove certain deductions you claimed on your return, such as charitable donations or medical expenses.
Learn more about tax audit insurance below and find out how it can be a useful tool in your financial planning next tax season!
What is tax audit insurance?
Tax audit insurance is a form of insurance that protects you from the financial consequences of a tax audit. Tax audit insurance can help you sleep better at night, knowing that if you’re audited, your expenses will be covered by the insurance company.
With tax audit insurance, you can rest assured knowing that if your business is audited for any reason, the costs will not come out of pocket. Tax audit coverage is provided in three different levels: Basic, Comprehensive and Premium.
How can tax audit insurance benefit you?
If you are worried about being audited by a government organization, there is a way to protect yourself. Tax audit insurance is an excellent way to avoid the stress of being audited.
Not only will it alleviate your stress, but it will also take care of any penalties or interest that might be imposed on you. By taking out tax audit insurance, you’ll have peace of mind knowing that should the IRS come knocking at your door; you’re protected.
What types of tax audits does tax audit insurance cover?
A tax audit is a process in which the examines an individual’s or business’s tax return to see if they reported all their income.
Tax audit insurance covers the cost of legal fees and penalties that are incurred during a tax audit, as well as any interest charges on the amount owed to the IRS.
How much does tax audit insurance cost?
You may think that since you have not been audited yet, you do not need to purchase tax audit insurance. In reality, this is a common misconception. Tax audit insurance protects your business from the potential costs of a tax audit.
Most tax audit insurance policies are priced at $1 to $2 per month for every $10,000 of your annual gross income. For example, if your annual gross income is $100,000, then you would pay about $200 annually for the coverage.
Where can you purchase tax audit insurance?
Tax audit insurance is a type of insurance policy that protects taxpayers from the expenses that can arise during a tax audit.
Taxpayers who are audited by the IRS typically have to pay for the costs incurred in the audit, such as attorney’s fees, court costs, and other related expenses.
Tax audit insurance is a type of insurance that will help you to mitigate the effects of penalties, interest, fines, and other charges that may be incurred by your business as a result of a tax audit.
The cost for the coverage varies depending on factors such as the size of your business, its complexity, your annual revenues or the number of employees.