Tax Audits

Preparing for Tax Audits

Tax audits are most definitely something every business owner strives to avoid. However, it can happen to you and when it does, you need to be prepared.

During tax audits, the auditor may look for income verification comparing your bank deposits to the income you claimed. Be prepared to show you invoices and receipts, as well as a ledger of the money coming in and out. They'll want to make sure that you spent as much as you claimed you did on your income tax return.

Expenses and deductions: during tax audits, the auditor will likely peruse your credit card statements, bank statements, "paid" receipts, and charitable donations. Be sure that your receipts match your books. Careful attention is often placed on business debts and expenses such as food, travel and entertainment. Be sure you can prove your deductions are legitimate.

Loans and interest: if you deducted business loan interest in your income tax return, this may be of particular interest during a tax audit. An auditor will review loan papers, bank statements and deposits to prove that you did in fact use the business loan to pay business expenses.

Murphy & Co. understands the stress of tax audits. Contact us today to ensure your income tax returns are filed properly. Call 508-238-5357 or email now!

Call the Murphy tax accountants today. Do what you do best run your business. Let us handle your small-business accounting details.

Bookkeeping

We can provide your company with efficient bookkeeping services. Accounts payable, receivable, payroll and everyday financial transactions can be tiresome. Why not let us handle your bookkeeping services and let you manage your business.  Accounting and tax preparation is not for every business owner and handing over to an accounting firm makes good small business sense.