As a small business owner, having a thorough understanding of your finances is crucial for success. As such, if you’re facing an IRS audit, you likely have many questions about what to expect. Thankfully, with the help of a knowledgeable CPA and a bit of prep work, you can successfully navigate the course ahead.

What Business Owners Should Know About IRS Audits 

What might trigger an IRS audit? 

You can receive an IRS audit for a variety of activities and concerns. These might include reporting income higher than is considered average for your area or business, taking deductions that are considered excessive in comparison to your sales, or reporting rounded sales numbers.

What will the audit entail?

Your audit might take place in one of three ways: with an in-office attendant, by mail, or with a field investigation. Mailed correspondence is the most common method and involves supplying the documentation requested by the IRS.

In the event of an in-office audit, you’ll have an interview with the attendant, during which you’ll be asked to answer questions about your tax filing and provide paperwork. Field investigations are less common and may involve a visit to your home.

What will auditors ask for?

Your CPA will help you prepare any documents associated with proving the validity of your tax return. These may include pay stubs, receipts, bills, and past tax returns. Even with the help of a professional CPA, it is essential to save copies of your financial documents for events such as audits.

How common are IRS tax audits?

While you should always do your best to ensure the most accurate filing possible, the chances of being audited are relatively slim. A recent study found that less than 1% of tax returns filed are examined.

If you’re seeking a CPA to help you manage the expenses and funds of your small business, turn to Amos Maney & Payne CPAs LLC in Baldwin, GA. The professionals at this firm are proud to offer residents and businesses throughout Habersham County quality accounting guidance and expertise. Call (706) 778-2129 or visit the website to learn more.