Essential Guiding Tips For Small Business Tax And Auditing
From the recent tax and audit trends, it is clear that most of the small and medium companies are not complying with the requirements set by the tax authorities. As a result of this, the tax authorities are unable to collect enough revenues annually. This has prompted frequent audits on the companies that don’t seem to meet the tax requirements. If you are a small business owner, it is advisable to hire tax professional to help you identify and deal with the tax issues that could lead to audit.
Why Your Business Is Likely To Be Audited
There are two major reasons why your company is likely to be audited. The first one is the outcome of any past history of audits of your company. With a reliable tax expert on your side, it is quite easy to identify the issues that led to the audit and address them immediately. When you address the main issues that arose from the past audits, you minimize the chances of future audits.
The current tax reports could also result in audits. It is advisable to check the latest tax reports and take note of any issues even though you may not change the returns you submitted to the tax authorities.
Get Ready For The Audit
The odds of being audited cannot be eliminated even when everything runs smoothly. It is advisable to be set with a team of tax experts and reliable systems that can handle any issues that may arise during an audit. To be on the safe side during an audit, you should also have a competent professional to represent your company during the activity. With a competent and experienced accountant on your side, you can be assured that most of the issues that may arise during the audit will be resolved effectively.
The representative is usually responsible for negotiating with the team from the tax authorities and providing the relevant documents If you want to meet the tax obligations of your company, it is advisable to equip your accounting team with the relevant information they require. Doing this minimizes delays, time wastage and inconveniences during an audit.
The Actual Audit
Every business regardless of its size should keep clear records of all the transactions. To ensure clear records of all the daily transactions, it is advisable to hire competent accountants to handle the task. During the audit, you may be requested to provide an accurate record of a particular transaction.
When providing proof of certain transactions, you should keep a few things in mind.You should offer only the records requested by the auditing team. Availing more documents that you are requested increase chances of newer issues coming up, this might complicate the entire process.When you hire competent and experienced professionals for the task, he or she will provide the required information and provide the relevant responses. This is what you need to avoid auditing problems.