IRS Red Flags

24 Jan

IRS Red Flags

Here are a few things that triggers the IRS to dig a little deeper into your returns:

1. Once you start to make over $200,000 Your audit risk goes from 1 in 100 to 1 out of every 27 returns.

2. IRS matches all W-2s 1099s so make sure you report this income. A mismatch will generate a notice.

3. Make sure your charitable contributions are proportionate to your income. If not, it will raise a red flag.

4. Taking higher than average deductions- have the proper documentation for your deduction.

5. Claiming rent losses as a real estate pro and having substantial W-2 income.

6. Schedule C is the money shot for the IRS. Be sure to keep accurate records on big deductions for meals, travel &     entertainment .

7. Claiming 100% business use of a vehicle.

8. Home Office Deduction- You must use the space exclusively and regularly as your principal place of business.

Reach out to Capri & Co. if you have any tax or finance related questions.

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