How To Be Compliant With The IRS

How To Be Compliant With The IRS

For Home Based Businesses / MLM / Direct Sales Reps

There’s no denying that there are some key items to complete when wanting to be compliant and not draw an audit your way. This is a short summary of the key points.

1.) File ON TIME

Yes, filing late and even getting an extension puts you in a different category. Most people just avoid doing their books all year long, then it becomes a big mountain of a task. Keep monthly books and then taxes are no problem to get together in 3 1/2 months.

2.) Show Your Intent To Profit

This is evidenced by having a business plan. The IRS wants you to be a business, not a hobby. Businesses have business plans and they are updated and adjusted on a regular basis. (not just done once and put away)

3.) Have Sufficient Business Activity

Are you working your business on a consistent, persistent basis? Or are you working it just once and awhile? Businesses go to work everyday. You can show evidence of this by keeping a date book with all of your activity in it.

4.) Record Keeping

I realize that not all people want to be anal bookkeepers, but you must have a system. An auditor should be able to trace your tax return amounts back to a set of books (can even be a spreadsheet) and then back to receipts. If you can do this, you are golden. If you cannot, hire a bookkeeper!

These are just basic things you can do to be compliant with the IRS in proving that you do actually have a legitimate business, not a hobby.

When you do these things, you will also note that your business will grow bigger!

For Expert Tax Preparation, CLICK HERE

Cheers

Steven Spangenberg