Small Business Owners: If You Are Audited, Will You Be Ready?

If you own a small business and itemize deductions, you run a greater risk of being audited. Yes, the odds still remain remote, but not as slim as those not self-employed.
A smart business owner is always prepared. Should such a business be audited, the IRS will be less likely to penalize and more apt to find itself owing the taxpayer additional money.
How to Stay Prepared
If you itemize deductions, have your annual taxes prepared by a professional who has spent years dealing with the IRS. An experienced enrolled agent, tax attorney or CPA can do the job. A tax professional known for delivering excellent customer service will not only teach and nudge you to remain prepared, but provide tax planning to best ensure you can safely keep a greater portion of your earnings in your pocket.
When searching for the right tax professional, choose one with experience in your type of business who knows what the IRS will dig for and what questions they would ask.
When Contacted By the IRS, Call Your Tax Professional
A request from the IRS by mail for a specific document seems benign. However, this could be a sign of a future problem. Spending a little money to chat with your tax professional before you respond may save you a hefty amount later.
Record Keeping
Keeping your tax records organized is essential. Routinely maintain your primary records (receipts and bills) and secondary records (mileage logs and spreadsheets) in good order year-round. Save all your tax returns, and keep backup information for at least three years plus your current year.
If you have questions concerning audits, contact us. We have been in business for nearly 50 years and possess enormous expertise on audit prevention and preparation.
Professional Tax Services is a locally-owned provider serving over 3,500 local residents and businesses. For more information call 661-259-1967 or visit www.scvprotaxservices.com. Through their complimentary EZ2 Thrive program, they provide unlimited free tax planning advice to their clients.