There is nothing worse than that heart-stopping phrase “you’re being audited.” Even though, the technical term is when an official financial examination of an individual’s, or organization’s accounts, the thought alone is enough to make most people shiver.
When making financial risks like taking on a new business, there is very real fear that the Internal Revenue Service in Galt CA will be knocking at your door in no time. To prepare here are three tips to help you avoid getting audited!
Business Risks
When taking on a new business, there is obviously the worry about staying out of complete financial struggle and despair. When paying for a new business it’s appropriate to put some expenses as business deductions however, there is a huge difference between businesses and hobbies. While walking that fine line understand that a business generates some sort of income. When paying taxes remember that any suspicious descriptions or completely ignoring the general rule will get you noticed and then your entire financial records will be under a microscope
Self-Hiring and Employment
When hiring a new nanny or household employee, the last thing your thinking about is how will this show up on my taxes. Well it might surprise you to know that the importance of paying them a strict payment and overtime if they work over 40 hours a week is very important. While some people might think, they can be paid under the table you need to understand that most of these situations will backfire. Instead, always keep payments above board and documented, so the IRS has nothing to look for
Divorce
The final tips is something to remember when you are going through a stressful time like a divorce. The important in this split is to remember that everything that is split in half between you both is evenly split. Furthermore, if children are involved there is a ton of paper work that should be agreed, signed and copied to each of you so when tax season comes along it’s easier to explain.
If you follow all of these tips, your chances of being audited by the Internal Revenue Service in Galt CA are that must less. As long as you keep your benefits, hobbies, employees and lifestyle changes in order.
