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| *Loan,banking and credit>>>car tax |
Can anyone share experience with Tax Audit especially for "Business Use of Home" and "Car Expense"? |
Are the auditors very picky about all the receipts and gas mileage record for being audited. Do I need to hire a tax consultant/expert to come along with me at the tax office for the interview date? Any help/advice will be of great help! For the home office expense, be very very careful. The IRS will disallow the deduction if you admit or show that at anytime the space was used for anything other than business. (For example, a claim was disallowed when the filer showed pictures of their home office, and pet food bowls were visible). You can not share space either. For example, if you use half of you family room for business, you can not claim anything. It must be dedicated. The easiest way to deal with a home office audit, is to have the audit done at your home. Then the agent can see exactly what you are claiming. Make sure there is no tv, radio, excercise equipment, or book shelves with novels. JUST BUSINESS. By the way, if your employer provides you with an office, you cant claim a home office. Also, make sure your business card reads your home address. For auto expense, im assuming you didnt claim the standard mileage deduction. In that case, the easiest way to justify expenses is make a monthly log of business travel. List by week the travel pts to and from, and who was visited. Determine the mileage on a weekly basis. (This is needed because you must declare what % of your car use was personal / and business) Once you have that number, get together the big bills (Insurance, car lease, major repairs) and formulate the % for business. You do not need receipts for less than $50, so tolls, gasoline, car washes need only be noted. We are a small business and went through an IRS audit last year. They are very picky about the mileage record and receipts to correspond. Business use of a home is based on Sq. footage so unless you actually cheated you should be ok there. If your records are not in order try to get them in order before the audit,don't let them come to your work place, better to schedule to go to their office and only bring along the list of items they asked for. If you need additional time to construct your records then tell them you are very busy this time of year and must have approx. 6 weeks to prepare for this. I met three times with the auditor...at their office.We ended up with a small refund. I am not sure she did something correctly but it was a small "gift" to me. 20+ years self-employed I recommend you do a little research with the Business Opportunity Search Engine Being community driven it鈥檚 a cross between a search engine and a Wikipedia. You can add, delete and improve the results for much more focused answers than a general search engine can provide. http://www.businessopportunitysearchengi... |
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