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7 Audit Flags for the IRS

Getting ready to file your taxes? Although it is commonly said that less than 1% of returns are audited, high income earners and those claiming business or rental property losses appear more subject to IRS scrutiny. While no one knows exactly what triggers an IRS audit, here are 7 audit flags the IRS may look for:

  1. The use of many round numbers, especially when it comes to expenses being claimed.
  2. The use of the word "Consultant" under the Profession field. Consulting has the potential to encompass a broad spectrum of vague services which may lead to questionable expenses being claimed for deductions. So the more specific you are regarding your profession, the better.
  3. Being self employed.
  4. Being employed by a company but also showing a business loss on the side to offset W-2 income.
  5. Large deductions for travel and entertainment, or unreimbursed job expenses.
  6. Drastic changes in income from one year to the other.
  7. Itemized deductions that are over 25-30% of your income.

To learn more, to get your tax returns prepared, or to simply get a second opinion on tax returns already prepared, feel free to contact me.  As always, I'm happy to help!

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Financial PlanningArticles

Why a Will isn’t Enough -the Process of Probate Many people believe that once they have their Wills in place, they’ve done a majority of their estate planning duty. Unfortu­nately, this is far from true . . . Tax Tips for Small Business Owners Many small businesses oftentimes have sloppier accounting procedures than larger firms. Here are the common traps to avoid . . . The Importance of Yield in Creating a Portfolio Although capital appreciation is a real part of your return, I tend to look at yield as the most healthy part of your return . . . 7 Audit Flags for the IRS High income earners and those claiming business or rental property losses appear more subject to IRS scrutiny . . . Will you run Out of Money one day? Will you have enough to last you for a lifetime, or will you run out of funds sometime after retirement? . . . The “Paris Hilton” Tax What is one of the reasons that the government created an Estate and Inheritance Tax? . . . Maximizing your Retirement Contributions there is a way to contribute more if you have your own small business. This applies even to those who have a one-person LLC . . . What to do with an old 401k? When dealing with an old 401k account, there are usually 3 options. What is the best? . . . Misconceptions about Wills There is a common misconception that if you have a Will created, it is enough to ensure that your assets will pass on smoothly to your heirs . . . TheRight Investment in the Wrong Place Sometimes you can make the right investment in the wrong place. How so? . . . Net Worth — do you know yours? Do you know what you are worth? It might be an eye-opener! . . . IRAs vs Roth IRAs To Roth or not to Roth?
That is the question! . . .
Can I get a tax deduction for my Home Office? Even if you are eligible to take a tax deduction for your home office, there are times it is not worth doing so. Why? . . . Why can't I just hire aFinancial Planner? How do you know who to hire? When you do hire someone, how do you know that they are doing a good job? What happens if . . . The Value of Value Investing When I used to visit India as a kid, the contrast between it and the US was striking. There were 5 black and white TV channels, women who wore saris . . .

Financial Planning
for Physicians

Why Physicians Spend More than they realize? Doctors spend more as they make more. But take away taxes, kids' educations saving, retirement, health issues . . . The INs & OUTs ofMalpractice Insurance 7.4% of physicians annually had a claim, whereas 1.6% made an indemnity payment . . . Physician ContractsProtect Yourself & your Interests When negotiating a contract for your new job as a practicing Physician, there are several important clauses . . . Disability Insurance & Income ProtectionNecessary but often Neglected! Your most important asset is not your home, your car, your jewelry, or other property. It's your ability to earn a living . . . Protecting your Assetsfrom Lawsuits & Creditors Is your wealth vulnerable to potential future creditors and, should the worst happen, could you lose everything? . . .

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