According to the Internal Revenue Service (IRS), more than 230 million tax returns are expected to be submitted annually. One of the most nerve-wracking aspects of the tax season for millions of people every year, is the possibility of an audit. For small business owners and those who are self-employed, the chances of being audited are even greater.
«Small business owners and the self who work are audited by about seven percent of the time," explains, and John Gregory, implement tax and founder of 1040Return.com. "That may not seem like many until you start the comparison of seven percent to millions of people who have applied. Then it really adds up! "
Gregory, who specializes in tax preparation for small businesses and self-employed, has explained that the team has run a higher risk of being audited because they follow a Schedule C form. This form often comes with a red flag to those who may be reviewed again.
Here are 4 tips to help small businesses and avoid the self-employed that are being audited are:
1. Be honest.
While some may find it tempting to lie about their income and expenses, it may come back to bite you. Those who are honest will be a far better game all around when it comes to avoiding the audit and living through.
2. Check the numbers.
There are people who have entered the wrong number, that will throw everything out. Whether you do it yourself or hire a professional to do it, you should review to make sure that everything is entered correctly.
3. Watch your deductible.
Acceptance may be tempting, especially for those who own their own business or are self-employed. However, if they do not do proper, honest, legitimate or not, they could be a big red flag that led to an audit.
4. documents electronically.
When you submit your tax return electronically, you will reduce the risk of errors from being moved in. It can help the process and ensure that you have provided without the change is recorded.
"There are other tips of the trade to help avoid hearing feeling," he said, adding that Mr. Gregory. "On our website, we provide resources, including videos and expense accounts that are used to help people save thousands of dollars since I started working here in 1998."