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How To Minimize The Risk Of An Irs Audit

How to Minimize the Risk of an IRS Audit

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Written by Global FPO Team

How to Minimize the Risk of an IRS Audit

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Division 293 tax is an additional 15% tax on concessional (before-tax) super contributions when an individual's combined income and super contributions exceed AUD $250,000 in a financial year. The tax applies to employer Super Guarantee contributions, salary sacrifice amounts, and tax-deductible personal super contributions, while total income calculations also include taxable income, investment income, and reportable fringe benefits. Although Division 293 increases the effective tax on eligible super contributions from 15% to 30%, superannuation remains one of Australia's most tax-efficient retirement savings vehicles. High-income earners can reduce unexpected tax liabilities by monitoring their total income, tracking concessional contribution caps, reviewing salary sacrifice arrangements, and planning contributions strategically. Understanding Division 293 tax helps individuals make informed retirement planning decisions, stay compliant with Australian Taxation Office (ATO) rules, and maximize long-term superannuation benefits.

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Common IRS audit triggers include underreported income, excessive deductions, unverified charitable contributions, and mismatched W-2 or 1099 forms. Even simple math errors or filing inconsistencies can flag your return for review.

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