| 7:39 pm on Dec 20, 2005 (gmt 0)|
I think a lot of this depends on whether you're on cash basis or accrual accounting.
With accrual, a sale, for example, is treated as revenue when it is completed, not when you receive or deposit the check. We're a "normal" C corp (U.S.) and use accrual accounting. There's not much that can be done at the last minute. At best, you can squeeze a few bucks of income from this year into next.
I do get a year end bonus, which generally wipes out most of our corporate tax liability. Of course, I have to pay high personal taxes on it as additional income.
My rule: nothing is worth the agony of an audit. We stay pretty far back from the line.
| 8:13 pm on Dec 20, 2005 (gmt 0)|
> nothing is worth the agony of an audit.
Talked to a tax guy today. He says: "filing a return is like your best offer".
He's been in independent tax biz for 10 years with a 5 partner firm (40 people) doing thousands of biz tax returns a year. They have seen 1 audit in that entire time. The odds of a small biz audit hands on? 1 in about 3 million.
| 9:59 pm on Dec 20, 2005 (gmt 0)|
Brett ..that depends on the ratio of auditors to taxpayers ..here it is approx ..one in 1000 self employed people get audited ( some areas of business are as high as 1 in 500 .."webwork" is looked at like home hairdressers .."red flagged"..special attention ..same as plumbers ..) companies with more than 1 employee average 1 in 5000 returns ..
The average self employed or small business person ( les than 100 employeess can count on being audited around once in 12 years ) ..once in 5 years if less than 5 employees ..
you need to keep your paperwork for 30 years ..!
Turning someone in to the taxman gets you 10% of whatever the taxman gets from them ..the individual taxman gets 10% also of the recovered penalty ..
( I know this cos a very very good friend is a taxman here ..France ..I have seen the paperwork to back up what I say )..on more than one ocassion ..plus it is acknowledged on govt websites ..
Metermaids get 15% of the ticket ..cops get 10% of the speeding fine etc ..
I could continue ..just count your blessings :)
| 11:50 pm on Dec 20, 2005 (gmt 0)|
so you forget to file a 1099 - thousands upon thousands of people do each year. So they send out an automated letter. They call that an audit.
| 4:21 pm on Dec 21, 2005 (gmt 0)|
Neither my business nor I have ever been audited by the feds. But sales tax audits happen from time to time. I can't recall them ever challenging anything. One day and they're gone. But assembling the docs they need can be hard work.
We use a small but very reputable CPA. I'll guess the IRS looks at who does the returns when they decide whom to audit. Some small time tax preparers are really sleazy.
| 6:08 am on Jan 5, 2006 (gmt 0)|
I dont get it. Are you saying that donating to some charitable cause before the end of the year will actually save you money over keeping the money yourself? I guess this is possible if you are talking about a huge amount of dough to lower your tax bracket, but this would be very rare. It takes a huge amount of write off for tax purposes to save even a small amount of money on your tax bill.
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