Tax Advice from a Former IRS AuditorBy
Everyone wants to maximize their tax deductions and reduce what they owe the government. But remember: If you report income as a small business owner, you face a higher risk of getting audited than individuals with just payroll or investment income. That's because it's much easier for small business owners to understate their income or overstate their write-offs than it is for individual employees, who have their wages reported by their employer. Indeed, the IRS devotes the greatest share of its enforcement budget—41 percent in 2006—toward small businesses. The agency in recent years has tried to increase compliance through education and enforcement. The Schedule C, which sole proprietors use to report income, is the single most audited business form, says Jeff Collins, a tax attorney and former IRS auditor in Schaumburg, Ill.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- This $14 Million Atlanta Home With Bunker Is ‘Safest in America’
- These Cities Make NYC Housing Look Dirt Cheap
- GE's New CEO Vows Sweeping Change After ‘Unacceptable’ Report
- Separatists Pledge to Fight On After Spain Moves to Oust Catalan Leaders
- The U.K.'s $86 Billion Pension Problem Is About to Solve Itself