The fear looming over most tax payers is being the subject of an IRS audit. Most professional tax preparers use computer tax software to prepare tax returns. Some of these software packages are good, others not so much. Most of the good programs will indicate a red flag deduction that might prompt an IRS audit on a client’s income tax return. Even so, there is no replacement for experience and common sense. Business & Financial Solutions uses top notch software and best tax preparers for checks and balances to your tax returns.
There are certain tax line items, that are consider red flag items. It should be noted that just because there are certain tax line items that are red flag line items, it does not necessarily mean that they are not valid tax deductions. Business & Financial Solutions will attempt to point out a few audit flags, where deductions are commonly abused. Again, we are not saying that if a taxpayer has legitimate expenses in these target areas that he/she should not claim them. However, you should be prepared for the IRS to ask you to prove them.
Here’s a list of red flag tax items:
- Home Office Deductions
- Charitable Donations
- Unreimbursed Business Expenses
- Digital Currency
- Not Reporting Taxable Income
- Day-trading losses on Schedule C
- Rental Property Losses
These are just a few areas that will draw attention to your tax return from the IRS. If you are concerned about some of them, and you are not sure about claiming these deductions, we are happy to answer your questions. If these are deductions claimed in recent income tax returns, and you think they should be reviewed, we can help Call Business & Financial Solutions and speak with a tax expert today at (855) 557-2222. You can also email us at [email protected] Click the following link for a more in-depth article on red flag tax deductions.