4 Reasons You Should Stop Worrying About Tax Audits

One thing that brings nightmares to a businessman’s dream is the tax audits. The letter from the IRS (Internal Revenue Service). It may happen once in a blue moon or maybe never guarantee that the IRS won’t ever audit you.

But here’s the deal. The word audit itself is a bit scary. It creates a state of panic for a lot of people. If you are honest in your business dealing then what do you need to be afraid of right? But what if you missed something or miscalculated or made a simple error of judgment? Questions will arise in your mind.

“I want to find a tax representative near me so that I can have him at my beck and call”, says one businessman in Dallas.

Sure, it’s good to have a professional accountant at hand but they will be the guiding hand only. They will complete their job responsibility i.e. manage the books, prepare you to handle the taxes, and file them on your behalf.

To help ease your fear, we have prepared a list of tax audits that will help ease your fears.

1. Low Probability

How often a businessman is audited? For an average American, chances to be audited are 1 in 143. And that is if you are in the middle / lower income range. If it’s lower than that, the chances of an audit are probably none.

It might be even possible that your entire life goes without any audit. Consider this good news in a way.

But it still means you need to hire audit tax services to do your taxes because you are a responsible citizen.

2. No True Trouble

The IRS has the right to audit people individually and businesses whenever they want to. It is true. But it necessarily doesn't mean that you are in trouble. Tax audits are part of the processing system. It’s a portion of the taxpaying public every year so it can be purely you are selected randomly by chance.

But sometimes if people are higher, it may put them at a higher risk of audit. In case if taxes aren’t done right, and does not match with the returns then you are likely to be audited.

But if you are not a high-income taxpayer then you do not need to worry.

3. A Couple Of Years Information

How far back do the IRS audits go? You may start to wonder about the old taxes or audits. What information would reveal itself? It’s hard to remember any details.

Luckily enough if your previous taxes are not held against you. Usually, only taxes of the past three years are reviewed in the tax audit only. When you look for a business tax accountant near me make sure they are well reversed in such a situation. They can guide you and explain everything in detail.

4. Attract Less Attention (If Possible)

Is it really possible you can reduce the chance of audit? Yes. it is. Certain items attract more attention than others like having expensive pets; horses or dogs that classify into the business, if you deduct lump sum amount for a charity or travel and entertainment purposes and even large loss not imbursed by the insurance company etc.

In such cases, an IRS audit is most likely to head your way. Just be aware that there are certain factors that can put an IRS audit on your trail. All you need to do is keep your record in good shape.

Conclusion

Even if these reasons are not enough for you to calm down, don’t be dissuaded. Be confident in your Records and Bookkeeping. Hiring a Tax Audit Service when you are starting a business makes sure you never miscalculate the profits or losses to avoid a tax audit in the first place.