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5 Red Flags That Will
Trigger An IRS Audit For Your Business!
For the business owners who think they can write off everything, below are 5 triggers that will generate an IRS audit.
Bookkeeping & Taxes
So many business owners want to write off items that trigger an audit. Then they get mad when they get "the letter."
The IRS letter with the words audit. It's not a good feeling. You could be having a happy day and then go to the mailbox and look as if someone died.
Oh it hasn't happened to you? Yet? Well that's good!
The audit is not because an individual saw something and generated a letter, actually it's AI better known as Artificial Intelligence.
It's a program the IRS runs to find problems with your taxes.
Below are 5 red flags that trigger an audit.
1. Reporting too much for meals. I know people that write off everything they eat.
The IRS clearly says that you can only write off business meeting meals and to write on the receipt who, when and what the meeting was for but most people including bookkeepers ignore it.
2. Report too much for travel. Las Vegas trips, international trips and coast to coast travel.
3. Entertainment such as basketball, football, baseball and soccer games and gear. Digital games they play on their cell phone including gambling.
4. Cloths, shoes, dry cleaning, gym memberships, massages, and pet stuff.
5. Owner cash withdrawals. The owner takes money out of the business and says he gave it to whoever when he probably went to Vegas!
If you've written off any of the above then most likely sooner or later the IRS algorithm will trigger an audit.
What should you do?
There is a tax form for every type of business filing taxes. What you do is find out what type of entity you are (sole proprietor, partnership, corporation etc.) and then you look at the tax form for your business.
The form (1040, schedule C etc) will show you what you can deduct. So you strategize by making sure whatever you purchase can go onto those tax lines and the odds of getting an audit decreases dramatically!
Tada!
-Steph
Do you feel helpless when it comes to the IRS? That's only because you haven't done your bookkeeping.
If your bookkeeping is up to date you will not be burdened with whether the IRS is coming to get ya!
You don't have to feel defeated!
If you have a good bookkeeping system no need to worry.
Imagine when it's time to file your taxes you are actually eager to see if your tax strategy worked!
The horrible tax frustration is gone!
If you are not interested in making sure your bookkeeping is correct and up to date, you can expect to feel intimated, paranoid, and pressured by the IRS.
The IRS loves business owners who go to Las Vegas!
Flat Rate Bookkeeping and Taxes, LLC is in compliance with the IRS.gov and CTEC.org
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Does the subscription include bookkeeping and tax services?
Yes! Includes Federal and State taxes for California residents only.
What if this doesn't work for me is the subscription refundable?
You can cancel anytime and if you prepaid your subscription annually you will get a prompt refund for all used months.
You can also keep all your reports and get a back up copy of your accounting file.
If your subscription is monthly and you cancel you can keep the subscription until your monthly term ends along with any generated reports!
Is your company licensed, insured and bonded!
Yes! For our protection and yours! When you subscribe you have access to our confidential documents.
Can I speak to a live bookkeeper or tax pro?
Absolutely! We help our clients with their bookkeeping and tax questions.
Subscription Frequently Asked Questions
January 2021
Flat Rate Bookkeeping and Taxes LLC
Bookkeeping in 3 minutes. I mean 2 Minutes!
Bookkeeping doesn't have to be complex!
Are you still agonizing whether to buy bitcoin or not?
In September 2019 bitcoin was $10,000 per coin and now in January 2021 it's $32,000 per coin!
That's ridiculous!
People are confused by bitcoin. They are nervous about buying it.
Everybody is being cautious!
Don't be curious about bitcoin be excited!
Bitcoin has been around almost a decade and has paid its dues.
Don't be fearful of bitcoin. Just buy $100 bitcoin and let it ride!
You have nothing to lose. Even $100 is nothing because you can buy 20 coffees, or 5 lunches.
People think how in the heck can I afford a $32,000 coin?
You don't try to buy the whole coin you buy a fraction of it. That how I got started! I thought when bitcoin was 10k I had to spend 10k.
Not the case.
Crypto currency is not going anywhere.
Bitcoin just happens to be the granddaddy of cryptocurrency. These days almost anyone can create their own cryptocurrency. I have a website called poormans crypto. If I want I can create a digital currency with the same name.
Let's say I have $500 of poormans crypto and you buy $50. Thing is if you can't find another person or business that accepts poormans crypto then it has no real value.
But if you found a place where you can buys stuff with that $50 of poormans crypto you will not need dollar bills, a bank account or a credit card to buy the merchandise.
bitcoin is the biggest opportunity right now! Paypal now accepts bitcoin!
If you need help call Steph 747 263-2016
If you want to keep money in your pocket and not give it to the tax man, bookkeeping is the key!
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Test Your Skills
I just filled out several the PPP loan docs for a Chase client and I see that to get your loan forgiven you better be accurate.
I know the loan is as low as 1% but if you don't have to pay it back then make sure your payroll is correct.
Tell your bookkeeper, payroll clerk or accountant to:
1. Double check the employee count on your 941's and DE 9C's for all the quarters and make sure they match.
2. If you have a payroll company like Paychex or ADP take advantage of the reports they provide as they are PPP ready, but they can make mistakes too so check the numbers.
3. Whatever you do read the paperwork thoroughly and try to use all the money for payroll only if possible.
Download this fact sheet if you need to.
If you need help contact me 747 263-9016.
-Steph
Hey indy contractors and business owners that do business on-line with a 3rd party processor.
If you sell a lot of products and services on-line that total more that $22,000 or 200 transactions, then you will probably have a 1099-K sitting in a file from Paypal, Venmo, Zelle, Square, eBay or any other 3rd party processor.
So don't forget to check after January 31, 2021.
Because if you forget to check and the processor sends the 1099-K to the IRS and you don't know about it and did not add the income to your taxes, that's a red flag and you will get a letter from the IRS.
-Steph
Hey guys,
I'm sure you already know, but the IRS changed the 1099-Misc for 2020. So make sure you don't breeze through it!
Lawyers, accountant and other service professionals are now getting a 1099!
Indy contractors and business owners that do business on-line with a 3rd party processor should also beware.
If you sell a lot of products and services on-line that total more that $20,000 or 200 transactions, then you will probably have a 1099-K waiting for you.
Paypal, Venmo, Zelle, Square, eBay or any other 3rd party processor give out 1099-K's. So don't forget to check your account after January 31, 2021.
Because if you forget to check and the processor sends the 1099-K to the IRS and you don't know about it and did not add the income to your taxes, that's a red flag and you will get a letter from the IRS.
-Steph
The value comes when you can bypass the middleman to get what you want for less along with more security.
Does that make sense?
So bitcoin started out in the same boat. Some people saw the value early on and bought in. Those people are millionaires now!
Now there are numerous business from Mc Donald's to banks starting to take bitcoin and that's why it's growing!
One day the US dollar will be replaced with digital currency. The government will buy your dollars back for about .10 on the dollar.
Well maybe .11 cents.
All you need is a little piece of bitcoin. You don't have to buy the whole bitcoin!
Look if the IRS recognizes bitcoin, not as US currency (yet) but as 'property' that is comparable to cash, you still get taxed on it.
What the heck are you waiting for? Click to buy bitcoin now!
You can also download my ebook below for a little bit of info.
-Steph
Soon bitcoin will be accepted everywhere. Just like when American Express came out!
So many business owners get behind with payroll taxes.
Those dreadful fees keep you awake at night and when you do sleep you dream of the IRS garnishing your bank account.
Forget those horrible nightmares and take out a Payroll Protection Program loan.
There is a second round coming and if you didn't get a loan the first time around maybe this time you can.
No matter how many employees you have you must take advantage of this program when it becomes available again.
If you use the money for payroll and payroll taxes you can actually have the loan forgiven and not pay the loan back!
Happy days are here again!
If you need help with an existing or new PPP loan contact me 747 263-9016.
-Steph
Maybe you'll get the second round of funding!
Flat Rate Bookkeeping and Taxes LLC
PO BOX 34652
Los Angeles, CA 90034
Tel 747 263-9016 Fax 310-693-9133 info@flatratebookkeepingandtaxes.com
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