The IRS is Now Auditing You – What Can You Do?

This notice is something we all fear: The Internal Revenue Service (IRS), is going to examine your personal and business tax returns. "Examine" is IRS-speak to mean audit. The IRS claims it doesn't audit people. It simply examines tax returns. You can look for the best Orange County tax attorney via https://www.sempertax.com/orange-county-irs-tax-attorney.

3 Things to Do Now to Prepare for Getting Audited

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What should you do if a letter arrives in your mailbox? First, don't panic. Take a look at your tax return to see what happened. The IRS letter will clearly explain what is being reviewed, what you should do and when your deadlines are. Some examinations can be done entirely via mail, while others require a combination of mail and phone calls. 

Others can be done at your office or in your home. The first notice you receive by mail (also called a correspondence audit) is likely to contain either a request for additional information or a letter informing you that the IRS proposes changes to your return. You will only need to deal with one or two issues. 

You can reply by mail or request a personal interview. You have two options: accept the IRS's proposed changes to your tax return and pay any additional tax or you can dispute the results and provide evidence to support your position.

Notices for in-person examinations will inform you of the time and location, as well as what documents you should have. You can call the IRS to reschedule if the time is not convenient. The IRS will work with you to resolve this matter. Interviews are usually conducted in person at the location where the records and books are. Expect some disruption if you own a business.

Running a Cleaning Business? Understand Your Taxes and Deductions

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If you are in a cleaning business, you must agree that it’s a busy occupation. While professionals in the industry don’t get much free time, they don’t get much time to think about calculating their taxes. However, due to this busy schedule, you might be missing out on various deductions and savings you are likely entitled to. This quick guide will take you through what you should know to do the calculations and your tax returns right.

Salaries Versus Allowances

You might be pretty clear about what a salary means. But you might be calculating it wrong by adding your allowances and reimbursements to it. Salary covers the income part that’s included in your payment summary. Allowances refer to compensation for certain expenses, performance, or risky jobs while at work. For example, you might be getting allowances for travel and meals while at work. But not all of them qualify for the deduction and you should check with a taxation expert for the best advice.

Reimbursements

There’s a clear line of difference between allowances and reimbursements. An allowance is the extra sum paid for good performance or taking up extra work and reimbursement is the return against what you spent for the job. For instance, if you are buying tools and equipment for work, your employer may or may not pay you for that. Getting the money back from the employer after spending it for the job falls under reimbursement.

And if you are not reimbursed a sum, you can claim a deduction for the same, provided you have proper receipts. While you can claim for things like tools, clothes, and more spent particularly for the job, a Toongabbie accountant can make the exact calculations for you.