How Stay Safe from Tax Audits Of IRS?by Harley Green Accountant
Several things can be there that can make the people scare off. However, a Tax audit is one of them which often gives nightmare to the small business owners. A tax audit by IRS can be an issue but is not something that one cannot avoid. No doubt that the audit happens rarely but still all the business owners try to avoid it as it brings hassle to business as mentioned by a tax preparer doing tax audits Santa Monica. As per the 2016 data book, only 0.8% of people are audited for tax returns. However, the current post is all about the ways to remain safeguarded from the tax audits.
Here are ways to avoid tax audits.
File your return properly
When you are doing business, the only things you must not forget is to file a return. No matter, you have earned the taxable income for the year or you are in loss, you must file the return correctly. In case of not filing a return, IRS may question you for sure. In case of not filing the return, you are prompting them to ask you questions.
Only hire experienced tax prepares
Often it has been seen that because of the wrong filing, people face the audit. Yes, even after hiring so-called professional tax preparers, people face the problem. A wrong tax filing can bring a problematic future ahead. Even there are some tax preparers you will find who really knows very less about the recent tax amendments as mentioned by a tax preparer doing Tax audits Santa Monica. Therefore, to avoid such issues, it is better to hire experienced tax preparers. It will reduce the chance of mistake and further, in case of an issue, they can present you in front of the IRS as well.
Never report a zero income
Profit and losses are part of the business. However, often to avoid tax, business owners report zero income. Such occurrence can prompt IRS to get into your matter to see however, even after zero income, you are continuing your business? It is better to show some income. In 2016, IRS audited 3.25% of the returns who posted a zero-income return.
Do not do anything suspicious
IRS often pointed those people who look suspicious to them. For example, overdoing charity. Charity is no doubt a good thing. But too much of charity may arouse suspicion in the IRS. If you are donating a certain portion of the incomes to charity and showing it for the deduction, it is okay. However, if you show a huge amount as charity without any documents like receipt, then it may cause huge issues. It is better to get the receipt for every charity that you are doing. Who knows, when you will need it.
Therefore, over here, you how to avoid the IRS audit. Avoiding the tax audits Santa Monica is not difficult if one follows the mentioned rules.
Created on Sep 19th 2019 05:04. Viewed 326 times.