Protect Yourself From An Audit By The Tax Man

http://devkhalsa.com/wealth/dan-whites-10-tips-on-how-to-avoid-being-audited/
How would you like an audit?

Cash strapped and bankrupt governments everywhere are looking for more tax money. Your money, my friend.

Beware small business owner! It is one thing to make money. Now more than ever you have to have the smarts to keep it.

There are two categories that generate the highest probability of interest for the tax department and the inevitable audit:

1. those who are self-employed and claim a lot of deductions
2. those who earn over a million dollars

You need to have your accounting system set up so you are audit ready. Off the shelf accounting software DOES NOT do this.

There is no such thing as a random audit. All audits are triggered by some transaction that attracts attention, or you may have done something that flags your file. In either case, you had better have audit ready books....


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[franklindwhite]

Hi datafork.

Yes, bank statements are a critical item, but in themselves they are inadequate to prove business rationals and on their own are simply a part of what is needed.

Dan

[datafork]

what about bank statements?  They track everything if you use debit.