Three Simple Steps to Keep the IRS Away

Sandy Botkin
Follow Me

1. Keep good records: You might think this just helps in an audit. However, good record-keeping can avoid IRS problems to begin with. Most audits are correspondence audits done by mail. Having good records may well avoid the more intensive in-person audits. This is where Taxbot can be incredibly useful since it meets all the documentation standards required by the IRS and Canada Revenue Agency.

2. Report all your 1099 income. IRS has new computers that match the income that was reported to them on IRS form 1099 with your tax return. It is essential that your return matches this 1099s.

Tip: What do you do if a form 1099 is wrong? Either get a new, amended 1099 , which is best or report a current figure with an attached statement showing a reconciliation with the 1099.

3. Keep your business and personal life separate: This means having separate bank accounts for business. Don’t deduct personal items because there is some tenuous business relationship such as trying to deduct the costs of a divorce because it might have an affect on your business. Following these three simple steps will certainly reduce your IRS problems and make your life less taxing.

%d bloggers like this: