Avoidng Tax Audits
If you are like most of us you have no desire to go through an IRS ax audit. Here's a look at how tax audits can be avoided.
The chances of you going through tax audits is something that cannot be put into figures as your chances of receiving a tax audit are something that will change from year to year depending on the figures within your data that you send as well as many other factors,
by knowing and understanding them you will be able to reduce your chances of getting one. However the chances are roughly 1 to 164.
If you earning less that $10000 per year then you will find that the chances of receiving tax audits is lower than those earning more. This is usually only applicable to people who are running a smaller kind of business, or those on an average or below average income.
There is a target range that has been set for rough earning potential and if the amount you earn is much more than what they feel you may earn then the chances of being audited will increase greatly. The same will go for the other end of the scale if you claim to be earning much less than they feel you should be.
If you ask for a lot of reductions on the amount you wish to be non liable to pay this will mean that your tax and earnings will be looked at more close;y, as will any items such as cell phone bills, as this is something that you could easily be using to make personal non business related calls and trying to get money reduced against the terms.
If you try and have 2 separate phones, there is less chance of this happening and if you do then you will find that it is much easier to defend as you will have the opportunity to show that the numbers on your bill do not match that of the one from the phone you use for personal calls.
If you have paid money in order to set up a business venture or extend your existing one, but have not earned any or little money from it, and try to claim these expenses back, this will also be something that the IRS tax will be looking out for so you will need to be sure you keep all details if this is the case. If it is not then don't take the risk! Always be honest and then you can be sure you will have a case if an audit is to occur. Being honest about what you spend and receive will mean you will always have the proof to back up your claim.
