Company.com, an information and lead generation portal for small and midsize businesses, has provided a list of 10 tips for helping businesses avoid IRS tax audits.
Strategy: Take these suggestions to heart. If you follow them diligently, you can dramatically reduce exposure to an audit.
1. Make your business a business, not a hobby.
If you are in your third year of business and reporting a third year of losses, that’s going to raise a red flag with the IRS.
If you can show the IRS the evidence, they’ll understand that you’re a loss-making small business—for a while. If you’re in year four and still making a loss, expect to hear from the IRS about when you plan to start earning a profit.
2. Report your income accurately. If you are paid $3,250 for a service you provide, and you round that down to $3,000 when you report the income on your return, that’s a red flag, too. It tells the IRS that you’re not keeping accurate record...(register to read more)
- How to Fire an Employee the Legal Way: 6 Termination Guidelines
- Small Business Tax Deduction Strategies
- What's on the tax reform agenda in Congress?
- Papa John's HQ pays up after franchisee stiffs workers
- DOL issues guidance on wage-and-hour liability for joint employers
- Draw on commission could threaten contractor status