10 Tax Audit Triggers You Didn't Know

This Week's Content Email Has Arrived. Add messages@docstoc.com to your address book | Unsubscribe.   Small choices that can get you in big trouble 1. Having more contractors than employees It's tempting to classify your workers as contractors rather than employees, since it can alleviate your business from the stress of handling payroll taxes. The IRS is on the lookout for businesses that mislabel workers to cut corners, and it is especially suspicious of businesses that have a lot of contractors. 2. Claiming "miscellaneous" deductions If you want to avoid an audit, do your best to avoid claiming too many deductions categorized as "miscellaneous" or "other" under Schedule A. Instead, itemize your expenses in the most relevant categories in Schedule C, and if you have a more unique deduction, do your best to clearly explain what it is. 3. Extremely high executive compensation Because high salaries reduce a company's overall income (and therefore their overall tax liability), the IRS takes a close look at high-income earners and shareholder-employees in C corporations. 4. An inconsistent social media profile Yes, you read that correctly. If auditors are suspicious of unusually high deductions, they will seek out any available information to corroborate your tax claims; sometimes, this involves looking at your social media activity. Click Here for all 10 Red Flags » Docstoc, Inc. 409 Santa Monica Blvd., Ste 2A Santa Monica, CA 90401 We send this email to members of docstoc.com to update you on your friends' messages and our updates. If you wish to unsubscribe, we provide a settings link at the bottom of this page, or send us an email letting us know. If you have any questions you can e-mail or call us anytime by using our Contact Us page. Docstoc® is not responsible for 3rd party products, services, sites, etc. Our use of 3rd party trademarks does not signify or suggest the endorsement, affiliation, or sponsorship, of or by us of those trademark owners or their products or services, or they of us. Privacy Policy: For full information please read our Privacy Policy. You may unsubscribe from this mailing: Unsubscribe. *Disclaimer: Legal information is not legal advice. Read More.