I'm committed to helping you get your business on the success track and have set up a series of special mastermind sessions to make it happen... YES! It's very well known that to resolve problems meeting goals and stated objectives, teamwork makes the dre
  • About
  • Protect Your Brand
    • Lawyer Up! >
      • RetainHer
    • Success Circle
    • Brand Protection Training
  • GROW YOUR BRAND
    • Business Impact Forum
    • City Speaks Tour™
  • PODCAST & TV
    • Power of Attorney Morning Show
    • Power of Attorney Podcast
  • Blog
  • Events
  • Media

Top 10 IRS Audit Red Flags

10/8/2018

Comments

 
No one wants to pay more income taxes than they are required to, but be careful if you do your own taxes. Attempting to cut your tax liability by getting into IRS grey areas can cause you problems later on. You don't have to do anything unethical to get your return pulled for an audit, you just have to raise too many of these red flags. If you’re in the middle of an audit or owe back taxes, contact us to schedule a free consultation. Contact us now.
 
1.   Making too much money. Sounds like a problem everyone would like to have, but making over $200,000 may make you more likely to be audited. The fact is that there are fewer auditors, so the IRS is focusing on where they can make the most bang for the buck.
Picture
2.   Not reporting all your income. No matter how much or little you make, report everything. In some way or other, unless you run a strictly cash business (another red flag), all of your income is reported to the IRS. W2, 1099 and other forms you receive are duplicated and sent in to the IRS. If your reported income doesn't match theirs, that's one more red flag.
 
3.   Math errors. Whether you file electronically or still file paper forms, your information gets entered into a computer. And one thing computers are very good at is doing math. If things don’t add up, or there was an honest mistake in inputting the information, it can raise a red flag. A math error won't necessarily get you an audit, but it will get attention you may not want. Make sure to double check your returns and have a qualified tax professional assist you and keep you out of tax trouble.
Picture
4.   Home businesses that never make money. Sole proprietorships that file a Schedule C year after year and always show a loss will raise a red flag. Even if you show a profit, but the profit margin is always unreasonably small, that will get the IRS' attention.
Picture
5.   Large charitable deductions. There is nothing wrong with being charitable and there is no legal limit to how much of your hard earned cash you can give away, but if your donation is out of sync with the norm, that's another red flag.
 
6.   Overstating business expenses. Depending on the type of job you have, there can be many legitimate expenses that your employer doesn't reimburse you for. If you’re a business, you might be tempted to write off just a little extra. These might be genuine deductions. But don't try to deduct something that's not on the approved list and don't claim deductions way outside the norm. Check with your tax professional and stay up to date with tax laws so you’re not padding your tax return with write offs.
7.   Sketchy real estate rental revenue or losses. Some people will 'rent' their property to friends or family at well below market value and then claim normal rental business expenses. As with other areas, the IRS compares what you claim against local standards to determine if this is a legit business. If not, they will disallow the deductions.
Picture
8.   Home office deductions. There are absolutely legitimate home office deductions but the IRS has very strict guidelines on what you can claim and how much. Try to claim too much and this is a classic red flag.
 
9.   Claiming losses for things that aren't deductible or deductible in your circumstances. One example is claiming day-trading losses on a Schedule C. If you dabble in stock trading and take a loss, it may or may not be deductible, but almost certainly doesn't qualify for a Schedule C loss. You also can't take a deduction for alimony. The IRS maintains a list of non-deductible expenses, make sure to check that and check with your tax professional.
10. Claiming 100% business use of your vehicle. If you spend most of the time in your vehicle doing your job, you may think it's easier just to claim the whole thing for business. Wrong. You will either have to show your personal use, no matter how small, or show you have a second vehicle for personal use.
Picture
Many of these items are red flags for an audit, but many are also legitimate deductions. The key is to have a qualified tax professional on your side, especially someone who is well experienced in tax resolution and can help you minimize the risk of an audit and the resulting tax problems down the road. At the very least, keep meticulous records and make sure you are inside the guidelines of the IRS. 
 
If you need an expert tax resolution professional who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. Contact us now.
Comments

Tax Tips for the Self-Employed: A Freelancer's Guide to Paying Taxes

10/2/2018

Comments

 
​​If you are an employee, you get a paycheck every pay period and most likely pay little attention to your taxes until the end of the year. Your employer does a lot of the work for you and you get a W2 at the end of the year.. However, if you are a freelancer or are self-employed, the responsibility of paying your taxes rests solely upon your shoulders.
There are 14+ million American taxpayers currently in the IRS collection division, and it’s easier to land there if you’re self-employed and don’t fully know what to do when it comes to taxes. Below are some simple tips to help you 1) reduce your tax liability and 2) keep you out of tax trouble.
Make sure to check with your tax professional to discuss your unique situation. If you’re already tax trouble, you’re not alone but you must take action before the IRS levies your bank account or seizes any property you have. Contact us for a free, no-obligation consultation and let our tax resolution team get you out of tax trouble.
 
With that said, let’s jump into the tax tips for freelancers and the self-employed.
Picture
1. Report business-related expenses and keep clean records.
If you purchased a new laptop to help you with your business, you can report that as a tax deduction. If you're using your cellphone primarily for communicating with business clients, you can claim that as a tax deduction as well. If you are able to prove with documents that your write-offs are legitimate, you can include them on your tax return. Make sure to keep strict and detailed records of any deductions in case the IRS wants proof later on.
2. Differentiate between your business and personal expenses.  
The IRS considers most business-related expenses as legitimate write-offs but if you go beyond a certain limit, you can be subjected to an audit. For example, you can include office furniture or office supplies in your tax deductions for your home office, but you definitely may not claim that new sofa set in your second living room as a deduction.
Picture
3. Make Estimated Tax Payments.
As an employee, you get taxes taken from your paycheck every time. If you’re self employed, you don’t. This can lead to a large tax bill at the end of the year that you’re unable to pay. Self-employed taxpayers generally need to make quarterly estimated tax payments. IRS Publication 505, Tax Withholding and Estimated Tax, has details on making those payments.

4. Time large purchases toward year's end.
If you have been planning to get a new printer or a new ergonomic chair for your home office, do so in the last quarter. This way, you can include the purchase as a tax deduction for the year. The bigger the purchase, the bigger the tax deduction.
Picture
 5. Monitor and track your use of your car, phone, and other utilities. 
It is often highly impractical to get a separate car, Internet subscription, electricity, or even a phone for your home-based business. What you should do instead is to keep track of how much you use these items for business-related purposes. How many minutes are spent on business calls? How much mileage do you drive for business trips? Keep a list of these usages and include them in your list of tax deductions.

6. Have a qualified tax professional on your side
There are a lot of variables when it comes to taxes. As a small business owner, having someone to turn to when you have questions is absolutely essential. You should focus on growing your business and doing what you love.

Picture

If you’re already in tax trouble and you need an expert tax resolution provider who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. Contact us
Comments

    Author

    Hey guys! Welcome to the Power of Attorney LeTonya Blog, a blog about business, brand protection, tax resolution and the latest in legal tips and strategies. I'm LeTonya Moore, an attorney who believes that we should leverage the law to protect and build a legacy. Have a Question? Ask LeTonya! Subscribe today! 

    Picture
    LeTonya F. Moore, Esq.

    Archives

    October 2018
    January 2018
    March 2017
    September 2016
    July 2016
    June 2016
    April 2016
    March 2016
    February 2016
    August 2015

    Categories

    All
    Audit
    Body Shaming
    Business Tax
    Career Search
    Child Custody
    Child Support
    Christian
    Christianity
    Church
    Counseling
    Custody
    Dating
    Dating Advice For Men
    Dating Advice For Women
    DIY
    DIY Denim
    DIY Skirt
    Empowerment
    Family Law
    Family Law Attorney
    Fashion
    Fathers Rights
    Federal Employment
    Finding A Job
    Getting A Job
    Honesty
    Income
    IRS
    Irs Debt
    Letonya Moore
    LGBT
    Marriage
    Money Saving Tips
    Motivation
    Naked
    Parenting
    #PrayForOrlando
    Recycle Clothing
    Relationship Advice
    Relationships
    Religion
    Resume Tips
    Resume Writing
    Right Piece Boutique
    Self Employed
    Shared Parenting
    Shooting
    Single Dads
    Single Fathers
    Single Moms
    Single Mothers
    Spirituality
    Tax
    Tax Deductions
    Tax Relief
    Tax Resolution
    Tax Return
    Thrifting
    Thrift Store
    Veterans Jobs
    Vision

    RSS Feed


  • About
  • Protect Your Brand
    • Lawyer Up! >
      • RetainHer
    • Success Circle
    • Brand Protection Training
  • GROW YOUR BRAND
    • Business Impact Forum
    • City Speaks Tour™
  • PODCAST & TV
    • Power of Attorney Morning Show
    • Power of Attorney Podcast
  • Blog
  • Events
  • Media