6 Audit Red Flags the IRS Uses to Choose Which Returns to Audit

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When it comes to your taxes, there are few things scarier than the prospect of a tax audit.

The good news is that most people aren’t audited.

Further, most audits are actually taken care of through the mail.  Many audits are routine, and require only that you send in a piece of missing documentation.

However, most people still prefer not to be audited at all.

As you prepare your tax return, consider the following 6 audit red flags that could lead to an increased chance of audit:

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In Honor of Financial Literacy Month: Back to Basics

April is National Financial Literacy Month, and that means it’s a great time to reflect on your finances, and think about what we can be doing to improve financial literacy for our children, and for others around us.

One of the best places to start when it comes to improving your finances is the basics.

It seems unnecessary to go back to basics; after all, many of us feel like we have the basics down pat.  However, no matter how advanced we think we are in the world of finances, it never hurts to have a refresher on the responsible use of money.

Here are some of the basics to get back to during financial literacy month:

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How the Small Business Jobs Act of 2010 Can Help You Save with Your Business

For many small business owners, being able to find every advantage is important — especially during tough economic times.

What many small business owners don’t realize, though, is that there are some provisions that help them save with their businesses.

The Small Business Jobs Act of 2010 provides you some opportunities to reduce your tax liability, saving money for your business.

If you qualify for the provisions in this law, the money you save can be used to go back into your business, helping you grow.  Plus, the tax breaks can help you stay afloat when you are struggling.

Here are some of the ways the Small Business Jobs Act of 2010 can help your business:

Treating Section 179 Property as an Expense

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Did You Get a 1099-K Tax Form This Year?

One of the newest tax forms to be released is the 1099-K.

This new 1099 tax form is designed by the IRS to help catch those who under-report their income from online business transactions.

Concerns that sellers on eBay are not reporting their income, as well as other third-party transactions handled by banks and processors like PayPal, are being overlooked as income, the IRS is hoping that the 1099-K tax form can help them recapture lost revenue.

Who Issues the 1099-K?

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Grow Your Nest Egg with Automatic Retirement Contributions

One of the essentials of preparing for the future is building your retirement nest egg.

The amount of money you save now can be a big help later, when you are ready to retire.  However, growing your nest egg can be a challenging task.

You might not remember to make regular contributions, and it can be difficult to put money away for retirement when you feel like you are struggling financially.

A great way to ensure that you save for retirement is to arrange for automatic contributions to your retirement account.

Setting Up Automatic Contributions

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What is the 403(b) Retirement Plan? – Overview

Even though the 401(k) is the most common retirement account in the United States, not everyone has access to such a plan.

Those who work for governments, schools and non-profit corporations don’t have access to an employer-sponsored 401(k).

If you don’t have access to a 401(k), you can, of course, open an IRA.  However, the contribution limits are fairly low, which can be discouraging if you want to contribute a higher amount toward a successful retirement.

The good news is that many hospitals, schools, non-profits (including churches), and governments have their own retirement account offering: The 403(b).

What is the 403(b)?

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What Business Expenses are Tax Deductible?

When it comes to reducing business income for tax purposes, the tax deduction is one of the most popular methods.

You can deduct some of the money you spend on business and lower your taxable income.

However, it’s important that you understand what makes an expense tax deductible for business purposes.  Otherwise, you could find yourself red-flagged by the IRS.

But What Business Expenses are Tax Deductible?

Ordinary and Necessary Expenses

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