Bonnie/Jeremy Hellman on mon 13 dec 04
As year end approaches and we Americans (some of us anyway) think about =
summarizing 2004 on a tax return, here=92s something to think about. I =
was reminded of this recently when a client was subject to an IRS audit. =
Actually, this advice (if not the reason) probably applies to everyone =
in business, around the world.
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A prime focus of the IRS is the search for unreported income, =
particularly on a Schedule C. One of the first things that happens in =
an audit is that the agent will add up ALL deposits into every bank and =
brokerage account, adjust for transfers, net W-2 income, gross receipts =
on Schedule C, and any other readily discernable income, and ask the =
taxpayer to explain any differences.=20
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As a CPA, I strongly recommend that everyone keeps detailed information =
on the source of ANY bank deposits in your account register, or =
somewhere else that will be available for 3 years after the year ends.=20
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If you make a DEPOSIT consisting of multiple types of income, such as =
net wages, insurance reimbursement, birthday/anniversary/holiday gifts, =
interest income from another account, income from another account, =
refunds, whatever, BE SURE TO LABEL IT AS SUCH. I like to use a separate =
deposit slip for each type of deposit, even when I deposit them all at =
the same time.=20
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-My personal recommendation is to deposit revenue into only one bank =
account.=20
-If I need to transfer money into another account, I try to make it an =
even multiple (no change, no single dollars) and I clearly label it in =
my check register.=20
-I also photocopy my checking account register periodically, in case the =
original gets lost or misplaced.=20
-I put the photocopy into my tax information folder with my other =
original documents that support all numbers on my tax return.
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If you want to discuss this, you can send an email to clayart or to me =
at mou10man@frontier.net.
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I will also be accepting a limited number of new tax clients for the =
2004 filing season, and would be happy to telephone you, or email you =
privately, at your request.
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Bonnie
Bonnie D. Hellman, CPA=20
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