No one usually enjoys doing their taxes and even worse is the dread of an IRS audit. Some are purely random, but others are because something in the filing doesn’t look right and it gets flagged for an audit. While choosing a San Antonio TX CPA like the Gonzales Group to handle your taxes is probably the easiest way to deal with taxes and random audits, these are some tips to help you avoid errors that could trigger an audit.
First off, be careful about the number of losses and deductions that you claim. Of course, you should take every legal one that you qualify for, but don’t try to take more than you should. Since small business owners use Schedule C to report their losses and profits, the IRS can compare comparable returns from similar small business owners in similar fields. If you deduct considerably more in a category than a similar size business in the same field, it’s likely you’ll be audited. Other particular deductions that tend to lead to audits are unreported income from other platforms; home office or vehicle deductions that include personal use; and business deductions that seem unusual for your particular occupation.
Underreporting your income is another way to draw the IRS’s attention. This is usually from freelance work or small things you may do on the side, or even stock dividends. In some cases, you may simply forget, but be aware that the IRS knows, because they receive documentation from the company that hired you for freelance work, etc. It’s important to keep track of all W-2 and 1099 forms to report all income. Also report interest and earnings from investment or savings accounts, as well as capital gains on property sales, stock trades, and cryptocurrency trades.
Finally, double check your math and data entry. Miscalculating your income due to bad math or the wrong form or formula does have the potential to have you audited. If it’s a small error, they may be more likely to contact you to simply ask for a correction. However, if it’s a large error, which could also lead to other errors, an audit becomes more likely.
If you do find yourself being audited, you have a right to know why and the right to appeal if you disagree. Your best bet is to hire someone to represent you to ensure the best outcome. There are various people, including lawyers and CPAs who can represent you. However, by choosing to work with a San Antonio TX CPA like the Gonzales Group from the start, there’s less risk of being audited in the first place and a better likelihood of getting the deductions you deserve and not wasting money by overpaying. Feel free to contact us today to make sure your taxes are being done properly so you can avoid potential fines, fees, and headaches.Tags: Accountants San Antonio tx, cpa firm in san antonio tx, IRS Accountants San Antonio
This post was written by Gonzales Group CPA