During tax season, IRS agents review tax
returns that are submitted by individuals and businesses. Most tax
returns process without incident; however, if an agent spots something
abnormal, it can trigger an IRS audit. While undergoing an audit does
not mean that there will be additional monies owed, most individuals and
businesses would rather avoid the process.
The professionals at Whyte & Associates in Rancho
Cucamonga have helped countless businesses prepare their taxes. They
have a solid understanding of state and local taxes. They provide the
following tips to avoid an IRS business audit:
- File a complete income tax return. Be sure that your tax return is complete. If you forget to check a box or enter information, it can trigger an audit.
- File and pay both personal and corporate taxes before the deadline. Late filings can cause penalties, interest, and even an audit. If you will not meet the deadline, ask for an extension.
- Report your income accurately. Many
people know that individuals in higher income brackets have a greater
chance of being audited; however, it’s critical to report all W-2, 1099,
interest, and investment income. Failing to report income can cause you
great problems with the IRS.
- Claim accurate deductions. Business
owners qualify for many small business tax deductions. However, you must
provide accurate documentation and be careful not to inflate your
expenses. A good bookkeeping system will ensure your expenses are
justifiable.
Working with a trusted accounting firm can help ensure that your tax returns are prepared properly to avoid an audit. For more information, call Whyte & Associates at (909) 575-0080.
