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Tag Archives: audit

Understanding Your Special K’s – 1099-Ks are now being subject to underreporting IRS audits

Understanding Your Special K’s – 1099-Ks are now being subject to underreporting IRS audits The IRS recently announced it is going to conduct automated audits of 1099-K filings against business income. This includes unicorporatated small businesses filing Schedule C with their Form 1040. How do you protect yourself from this audit risk? For the first time, the IRS is reporting that it will be comparing filed 1099-Ks against income reported …Read More

Defending Fair Market Value

Determining the value of items on your tax return is always open to interpretation. You do not want that to happen to you during an audit as it can lead to additional tax and penalties. Here are some tips to help defend your Fair Market Value (FMV) determinations. “Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would …Read More

Five Big Tax Mistakes – Don’t let them happen to you

 Every year thousands of taxpayers go through a ”gotcha” with the IRS. A large, unexpected tax bill. Here are five common causes of tax surprises from lost refunds to retirement plan mistakes. Every year taxpayers are hit with tax surprises that could be avoided if they just knew the rules. Here are five big ones that are easy to avoid with some simple planning. Mistake #1. Withholding too little. This …Read More

Audit Target: The Sole Proprietor

Often the #1 target of IRS audits, sole proprietors need to be prepared with good records. Here are some tips. Each year the IRS publishes their activities in a publication called the Data Book. And each year for the past number of years the number one target of audits are those tax returns with a Schedule C for small business activity. So how to prepare yourself for a possible audit? …Read More

Toss this. Not that – Post tax filing record retention

With a sigh you are relieved that yet another tax return has been sent off to the government. Another 12 months before you need to do this again. But before you close that tax file, there is still some work to do. If the IRS or state revenue department selects your return for review, you will need to be prepared. Here is what you need to know: Record Keeping Tips …Read More

No Check! Where’s Your Proof? – What to do about your need for documentation

Very few banks return your cancelled checks. So what do you need to do if required by the IRS to prove your deductions? Often this means staying ahead of the game at year-end. Year-end is a good time to ensure you have proper documentation to substantiate your tax deductions. This is important as many banks start deleting online documentation that is over one year old. Background Two things have happened …Read More