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Video instructions and help with filling out and completing Can Form 2220 Audit

Instructions and Help about Can Form 2220 Audit

I think we can all agree that being audited by the IRS is the financial equivalent of going to the gynecologist or proctologist for a checkup. It's awkward, cold, and invasive. So, if we can avoid it, why not? Here are 10 red flags that make the taxman snap on his rubber gloves for you: 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. However, 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. 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 heard right. 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. Facebook and Twitter are double-edged swords when it comes to our professional lives, so if you're planning to deduct business trip expenses on your taxes, be careful about tweeting photos that make it look like a party vacation rather than a professional excursion. 5. Family members on your payroll. It's certainly not uncommon to hire a family member, but the IRS will want...