Skip to content

Tips on Avoiding an Audit!

December 12, 2010

Clients have said that going to get their taxes done was like going to the dentist (not all that fun); until they met me, of course! ♥  But the worse stress, ever, for clients is being audited by the I.R.S.  There is no analogy that I can compare. At GAI (www.gunwel.com) we can represent you  and you won’t need to take part in that daunting experience. We have tips on how proper preparation and documentation can help you stay below the radar of IRS auditors. Every year, the Internal Revenue Service audits 1 percent of U.S. taxpayers. Though the odds are slim that your return will be singled out, they increase dramatically if you run a cash business like a bar or restaurant, take a home-office deduction, make large charitable contributions, or work for yourself.

Deductions and expenses that are disproportionate to the taxpayer’s income can catch the IRS’ attention. No matter what kind of business you run or how many deductions you take, you can lower your chances of being audited by following these steps:

  • Keep Accurate Books: The IRS is on the lookout for businesses that deal heavily with cash. They can quickly compare your business income to your living expenses and figure out if you’re living beyond your document means.
  • Deduct Within Reason: Writing off too many business-related expenses can put you in the IRS’ line of fire, especially if the income you report is relatively modest.
  • Check Your Math: A few mistakes in calculating deductions won’t raise a flag, but several will.
  • Back It Up: Business owners are required to keep receipts for expenditures of $75 or more for meals or entertainment, and to keep them for three years.
  • Get Professional Help: That means using a tax professional. Competent, professional tax advisors will warn you when taking a certain position can heighten the possibility of an audit and when a tax return looks fishy. Use us!

 At GAI (www.guwnel.com) we make the taxing experience less “taxing” (seldom do I get to use a tax pun) so give us a call today at 212-979-6830 or stop by for a visit. We are here to help!

Advertisements

Comments are closed.

%d bloggers like this: