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Worried about a tax audit? Rancho Cucamonga, CA, experts can a provide business account reviewPosted By Whyte & Associates
There are some common areas that are most likely to cause a flag by the computer program, including:
- A higher than average income. Less than 1 percent of individuals making less than $200,000 a year are audited. Individuals who make more than $1 million are audited nearly 11 percent of the time. While you don’t want to make less money, it’s important to keep meticulous records, just in case you’re audited.
- Out of proportion deductions. You should always take all the appropriate deductions. However, the IRS uses a table to determine how large your deduction amount should be. Don’t falsely claim deductions, as this can cause your deduction to be out of proportion with your income, which will cause a flag.
- Rounded or averaged numbers. You may think that one or two dollars won’t make a difference, but using rounded number can make the IRS systems think that you’re making up numbers.
- Home office deduction. This home office deduction only applies if that portion of your home is only used for business purposes. If you’re working from the dining room table or a corner of your bedroom, you won’t be able to claim this deduction.
- Continued loses. If you’re losing money year after year, the IRS may assume that you’re claiming losses to avoid paying taxes. Be sure that you have accurate records to clear up any allegations.
To schedule a business account review, contact Whyte & Associates today at (909) 575-0080.
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