What's your tax audit risk ?
According to a certain professional tax news publisher, the risk of an individual tax audit is 1 out of 170. Despite these relatively low odds of audit, one must still be careful not to elevate your odds. Here are the "red flags":
-disproportionately large deductions compared to income
-alimony issues in conjunction with the tax reform
-large charitable donation deductions
-small business meals, entertainment, and travel deductions
-small business deductions for use of personal vehicle
-virtual currency
-S-corporation losses in excess of stock basis
-losses for activities that look like hobbies
Ensure your CPA knows the art of mitigating the risk (I do!)
