Running a business is very hard work.
You have a lot to keep track of during a standard workweek, much less month after month. Promoting your business, managing employees, attempting to conserve on energy costs…it’s all in a day’s work for the small, medium and large businessowner. When tax season comes around? You might just be losing chunks of hair from the stress. This is where a business audit comes into play. These are fantastic resources for businesses attempting to get a better handle on their taxes, particularly if you haven’t yet invested in the aid of an accounting firm.
Tax preparation can give you a better idea of what’s to come while saving you money in the short-term. How could a business audit help you this year?
Check The Size Of Your Business
Not all businesses are designed the same. Some are a one-man show. Others involve hundreds of employees. Your business audit will reflect the size of your company and provide you the most accurate means of keeping track of your expenses. Small C corporations (with total assets of less than $10 million) faced an overall audit rate of 1% back in 2014. Compare this to companies with assets between $1 million and $5 million, which were audited at a little over 1%. C corporations with assets between $10 million and $50 million faced the largest at 6%.
Remember To Electronically File
There are a few ways to do your taxes. Some have to file them quarterly. Others prefer to ask for the assistance of an accountant to keep numbers as accurate as possible. Corporations with assets of $10 million or more are required by law to electronically file their 1120/1102S income tax returns. Civil fraud penalty is a term used to denote the underpayment of tax that results from fraudulent activity. Failing to pay these taxes or underpay what you owe will cause you to be charged 5% to 25% of the unpaid tax every month.
Always Keep Your Receipts And Information
Worried that your numbers might not be totally accurate? A business audit can help clear things up. One of the most common tips for people filing taxes is to always keep receipts, digital forms and any additional information necessary to keep your returns as spotless as possible. Individuals who filed a Schedule C (either Profit or Loss From Business) with gross receipts of $25,000 to $100,000 received an audit rate of just under 2% back in 2014. Those with gross receipts of $100,000 or more had a slightly above 2% business audit rate.
Stay Up-To-Date On Any Changes
Tax law is a dynamic entity. What may hold true a year or two ago may be tweaked later. A business audit service can make sure your business never falls behind when it comes to keeping up with its obligations. The IRS is able to audit any business tax return within three years of filing, as well as able to collect back taxes owed for up to 10 years. The RandD (research and development) tax credit, as well, can amount up to 14 cents of credit for every qualified dollar. When in doubt? Tax and audit services can help.
Reach Out To A Business Advisory Service
It’s all right if you’re not 100% up-to-date on all the recent changes. A business audit service is your go-between, able to supplement your day-to-day obligations while keeping you caught up on all the changes. Today the IRS carries out three different types of tax audits. You have correspondence audits (or by mail), office audits (you to the IRS office) and field audits (the IRS will visit your place of business). Choosing the right one depends on the size of your business, your assets and your past history with audit rates.
Keeping your business afloat is a full-time job. Let a professional shoulder some of that responsibility.