There’s four words that no small business wants to hear –California sales tax audit. Here’s some great tips for avoiding the IRS when it comes to tax time. If you check these boxes off you’ll more than likely be safe, so you should keep them somewhere handy for reference.
File on The Due Date
We will bet there’s more than a few small business owners out there rolling their eyes when you read that one. However, even the simplest tips bear repeating. It’s worth mentioning again but if you don’t file your taxes on time, you put a red flag beside your name for the IRS. You might not get audited, but you’re certainly putting yourself in line for some late payment penalties.
Remember to Sign Your Return
More eye rolling, right? Believe it or not, there are people who are so caught up in the day-to-day of their businesses they forget to sign their return when tax time comes. If you think about it from the IRS’s perspective, you’ll see why this is considered a big red flag.
Simply put, the folks that work for the government wonder what else you’ve left out if you forgotten to sign your return. Something that small could even put you in line for a California sales tax audit.
Record All Your Income
We all know how tempting it is to cut corners when you’re in business, but you’ll need to make a habit of recording all of your income. No matter how small the amount, everything needs to get included. Any assets that you sold are all part of the income the government will want to see on your tax return.
The more successful your small business, the more chance you have of being audited. In fact, your local Better Business Bureau even suggests different ways to keep meticulous records. Here’s another helpful tip. Small businesses need to be wary of tweaking any payments or invoices because they will show up as discrepancies with the larger sales tax numbers for the entire year.
Another excellent suggestion is having several accounting periods and closing each and every one of them out with different security codes. That way people who will have access and the ability to tweak any of these records is very limited.
If you get in touch with us today, we’d be happy to go over some of the other methods for avoiding Los Angeles sales tax audit problems.