Audits are always a fear for tax filers. There is always a little voice in our head telling us that maybe, just maybe, a mistake was made on your tax filing and that the IRS will come after you as a result of that mistake. Audits certainly aren’t something that anyone wants to go through, but they are more manageable than their reputation would have them out to be.
With that said, people who are self-employed or own a business are at an even greater risk of being audited than individual tax filers without such circumstances. The IRS looks at these filings very closely and there is, quite simply, a higher risk of being audited if you own a business or are self-employed.
So what can people in these situations do? Well, first of all, don;t panic. As we mentioned above, an audit is not the end of the world. You can get through this audit and come out the other side in just as healthy a financial situation as before. Obviously an audit poses a threat — but it doesn’t have to ruin you.
The best way to head off any audit troubles is to cross your Is and dot your Ts. Be honest about the figures that you present to the IRS, and make sure that they are correct. Look your filing over numerous times. And just when you think you can’t check the numbers another time without screaming into a pillow, check them again. Also, be very careful with what you deduct and how much you deduct. Deductibles can be red flags to the IRS.
Source: Ground Report, “5 Tips to Help Small Businesses Avoid Being Audited,” Oct. 10, 2014
