According to a recent article in Forbes magazine, the IRS has increased both the frequency and intensity of their most demanding line by line audits. As a self-employed taxpayer, you stand a greater chance (1 in 112) of being audited than taxpayers who simply file a Form 1040 (1 in 6616). Taxpayers with very high and very low incomes also have a greater than average risk of being audited. Smart Money magazines reports that the income level that triggers the most audits is $100,000.00 and over. The next likely group to be targeted are taxpayers who report under $25000.00 of income.
Did you know that the city you live in can also influence your chance of being audited? According to Martin Kaplan, CPA who wrote the book "What the IRS Doesn't Want You to Know", 1.57% of all returns from Los Angeles get audited: however, if you live in Albany, NY the audit rate falls to .25%.
Amazing! So what can you do?
Accurate and complete records are essential for reconstructive purposes if you are audited. Written records to account for how much money you earn, the total paid out for direct and indirect business expenses, payments for utilities, and total miles traveled exclusively for your daycare business must be maintained.
As an accountant and income tax preparer who is often called upon to audit clients' records, I would like to share some tax tips with all of you. Since I have operated my own home daycare for 6 years, I have been able to see both sides of this issue and have lots to share!
Just what to keep track of and how to record it will be the focus of this feature. I also plan to cover a multitude of wonderful income tax deductions which are applicable to home daycare businesses as well as creative tips which will help to reduce your taxes.
Dear Reader: You can help us make this section even better!
All of our articles and ideas have come from our imagination and from reader submissions. Please use this form to contact us if you have content you would like to add to this website. Make sure to add your comments at the bottom of the article! And don't forget to visit us on our child care forums for friendship, support and learning!
Webmasters and Authors:
We will gladly include a link back to your site or book in exchange for sharing your content. Just contact us!
Make Sure to Visit These Related Links and Articles
To create link towards this article on your website, copy and paste the text below in your page.
Preview :
The Audit Nightmare Friday, 23 January 2009 The Audit Nightmare According to a recent article in Forbes magazine, the IRS has increased both the frequency and intensity of their...
One of our favorite holidays is Easter. We love the religious and non-religious alike. There is much joy to be had in spring and no matter how you celebrate, we are sure that you can find something for everyone in our Easter section. Click here to get started.
Each month we will feature new activities, letters, and themes. It is easy to make learning your ABC's fun with all of our letter themed activities. The letters featured this month are:
Subscribe now to get updated when we add new articles, activities, crafts, stories, fingerplays, parenting advice and more. You will be updated each time we add a new article to ChildFun. (This replaces our previous newsletters.) Click here to subscribe!
Provider 
