Top 7 Reasons Why The IRS Will Audit You
VIDEO TRANSCRIPTION – Top 7 Reasons Why The IRS Will Audit You. Hi, I’m Stephen D. Cooper, also known as Coach Coop with Cooper’s Accounting Service, because your financial freedom matters.
If you like great tax tips, download our popular financial guide at our website, yourfinancialfreedommatters.com, or click below this video. As we get phone calls from various potential clients and even current clients,
They wanna know what are the new IRS rules or what are some of the things they can avoid by being audited by the IRS. We’re gonna cover several topics, but we’re gonna do seven for now. Number one, make it a math error. In a math error, it’s not a computer error. You may click on the wrong schedule. You got to make sure that if you click on schedule A, itemized deduction,
or income that goes into schedule C, you want it to make sure it goes into the correct schedule. That’s what can create a math error. Number two, excessive deductions. What are the excessive deductions? Charitable donations. If you do not have a history of making charitable donations, if you put down five, $10,000, based upon your taxable income, that may be too much. Also, medical expenses.
Medical and dental expenses are deductible under schedule A. Business write-offs, if you only make $200,000 a year, you don’t want to put down that you got office expense for $100,000. That just does not make sense. Number three, self-employment. With schedule C, you automatically have a 50 to 6 % chance of being audited. So you want to make sure that your numbers are reasonable.and that they flow.
What do I mean by this? As an accounting firm, one of my biggest expenses besides payroll is office supplies. So meaning if I was a daycare, one of my biggest expenses will be food supplies. Does that make sense when it’s a unique business? Number four, you want to make sure that you are not aggressive in claiming your auto or your home office deduction.
You want to be reasonable, fair, and make sure your numbers flow. number five, math errors and how to fix them. Once again, your math errors, you don’t wanna put in too many zeros, which is a human error. Cryptocurrency.
You wanna make sure that when you are filing your cryptocurrency, that you are filing it similar to a stock trade as a result of this. You typically gonna do it on a schedule D. So you got to do it on the correct schedule first. And you put in when you bought the crypto and when you sold it. If it’s less than a year, short term. If it’s greater than a year, long term.
As we did the recap, you have an idea of what these potential seven choices that one can make to reduce your risk of being audited. For more easy financial tips, sign up for our newsletter by going to yourfinancialfreedommatters.com or click on the link below this video. You can also download our financial guide as well. If you like a free 20 minute smart money consultation, give us a call at 562-436-2600.
Well again, I’m Steven D. Cooper, also known as Coach Coop with Cooper’s Accounting Service. Do not miss our next video where we will cover what is the purpose of having an NAIC code. See you next
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