How to Avoid an Audit – or at Least, Survive It!

Jet Tax employs enrolled agents (“EAs”), tax specialists licensed by the US Department of the Treasury. We have offices in Antioch, CA and Bozeman, MT.  We can be reached via our website, www.jettax.orgor by phone at (925)778-0281

 Home Offices.  Photos of your home office and a schematic of the office floor plan will support your home office deductions. Be prepared to show invoices and monthly bills for any kind of office equipment, utilities and technology used in your home office. Note that if you are renting business space, you probably don’t qualify to deduct a home office. If for some reason, however, you genuinely need both a rented office and a home office, include a disclosure statement explaining the situation to IRS.

 If you are self-employed, another factor that statistically makes you more likely to be audited is filing a Schedule C. Self-employed taxpayers filing Schedule C run a ten times greater risk of being audited than those who have incorporated. And there’s this bonus: if you choose to incorporate, you’ll be eligible to claim more deductions than you would if you were an unincorporated business owner filing Schedule C.

 Meals and Entertainment. For these deductions, good documentation can save you from a world of hurt if you wind up in an audit. Holding onto receipts with dates, times, amounts spent, names of your companions and notes on what kind of business was transacted will back up your claim that these items were deductible.

Disputed Dependents. The often disputed dependent claim is another area where good documentation can save the day. If you and an ex-spouse are both claiming your children as dependents, you should be able to substantiate your assertion with a separation or divorce agreement that outlines who is able to claim which children as dependents, where the children will live and when, and who pays for what parts of the children’s support.

 Fear of an audit should not keep you from taking advantage of legitimate tax benefits. To make sure you don’t overlook allowable credits and deductions, start keeping better records, and put an enrolled agent or other licensed tax professional on your business team. If you do wind up being audited, you’ll have an experienced tax professional in your corner, able to speak directly to IRS on your behalf. 

 About Jet Tax

---