WHAT IF YOU LOST THE RECORDS TO BACK-UP YOUR TAX DEDUCTIONS – OR NEVER HAD THEM?
Auditors are notorious for saying, “No documentation? No deductions.” In fact, when a taxpayer loses a deduction in audit, the most frequent reason is that he or she did not have records to prove they qualified for it.
Here’s how to prevent that from happening to you.
First, use whatever means you can to determine an accurate estimate for the deduction value. Then, when you file your Tax Return, attach a Disclosure Statement (that’s IRS Form 8275), to explain why you don’t have the records and how you came up with the numbers you used.
That form will never be seen by a human being (or even an IRS employee) unless the computer kicks out your return for audit consideration.
If ultimately you are “selected” for an audit, the auditor will see (from your use of a Disclosure Statement) that you are a person attempting to be an honest tax filer.
Not a bad place to start out an audit.
DO YOU HAVE A REALLY GOOD TAX PRO?
Are you working with a tax pro who really understands and applies the home-business tax deductions described in the book, ““WINDFALL Tax Savings APPROVED! for Small-Business Owners”“?
If so, consider yourself fortunate. Most tax professionals really do not understand home business tax deductions adequately.