Key red flags that have the potential to trigger an audit include reporting high income, forgetting to include income from W-2s and 1099s, excessive charitable donations, and the misuse of deductions like home office expenses and vehicle costs. There are also concerns relating to rental real estate losses, cash transactions, foreign bank accounts, and large cash deposits.
By understanding and avoiding the red flags that you can – maybe not high profit, right -, and by keeping accurate records, you can minimize your audit risk and ensure compliance.
For personalized advice, don’t hesitate to consult a professional. Contact our office to schedule a consultation and get expert advice tailored to your needs. We’re here to help you ensure you’re properly recording activity and are prepared for an audit if one happens.
Joy Lutz, CPA, CTP
As the founder of Aligned CPA, Joy has built a firm that is your strategic financial partner. With a growth centric approach, we build meaningful relationships with our clients because we value their success as much as our own.
Positioning ourselves as the tax and financial strategists for your business, we help you make empowered, financial-based business decisions that lead to long term success.
Joy Lutz, CPA, CTP
I help our client’s keep more money in their pockets by implementing proactive tax strategies.
I promise you, working with a CPA and Certified Tax Planner can be much more exciting than crunching numbers and reviewing last year’s taxes.
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