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For business owners, ‘YOU’RE BEING AUDITED’ is a scary subject to read. It’s the worst-case scenario, and something none of us want to experience. Moreover, we’re led to believe that getting audited is the end of a loss, not the beginning of an investigation. There’s just so much false information out there, but not all of the myths you hear are true, so we’re here to clarify it all.
Audit Myth 1: Those with moderate incomes don’t get audited. FALSE! There is more pressure than ever for the IRS to collect all money owed, and they’re hiring extra staff for the audit process. Just because you’re not a millionaire does not mean you’re safe. Those with low and moderate incomes are vulnerable as well, so forget how much money you make, and focus instead elsewhere.
Audit Myth 2: If I take the home office deduction, I’ll get audited. FALSE! There are zero automatic triggers for audits when it comes to deductions, but many people avoid taking the deductions that they deserve because of these fears. There are many deductions like this that people avoid, including claiming older dependents, and deducting expenses. If the information is true, you’ll be able to explain it all to the IRS.
Audit Myth 3: Audits are the end of the world. FALSE! A lot of the times, audits are not in-person appointments, but instead a request for a verification of documents or records. Maybe you sold a small amount of stock and forgot to report it – a common, harmless act that an audit stems from. At times, you might even show information that entitles you to a larger refund.
Regardless of any outcomes, the best way to handle an audit is to avoid one. To put yourself in the best position possible, use a CPA with a trusted reputation. At Corporate Capital Inc., our in-house CPA has decades of experience filing thousands of returns.
Call us today at 855.527.3366 to learn about what we do to protect ourselves from audits.