If you are exaggerating your business expenses, this increases your risk of getting audited by the IRS.
The IRS measures typical amounts of expenses by your type of business, and a tax return showing 20 percent or more above the norm increases your risk of getting audited. With computers today, it is very easy to standardize expenses by the type of business that you own and create realistic ranges.
The IRS does not have a sense of humor about using your business to operate your personal life. In fact, they like to examine your country club memberships, vacation travel, and dining habits during an audit so it is best to avoid putting yourself into a situation for triggering an audit notification.
Call Canner Brody Yan CPAs to lower your risk of getting audited by the IRS.