CHICAGO — Over the next couple of months, most building service contractors (BSCs) will start getting their records together in order to file their taxes, according to a press release.
It is important for BSCs to understand what the Internal Revenue Service (IRS) typically scrutinizes on a business tax return and, hopefully, avoid an audit, the release stated.
"It all starts with proper documentation. Proper record keeping year-round is critical and helps ensure taxes are filed correctly and deductions can be proven if questioned," said Michael Schaffer, president of Tornado Industries and a senior executive with Tacony Corporation's Commercial Floor Care Division.
Schaffer also advises that BSCs should be aware of the five "tax hot spots,” those areas the IRS puts greater emphasis on when scanning business tax returns, the release noted.
According to the release, those areas the IRS watches closely most often include:
Tax Time Hot Spot #1: Unreported income.
Tax Time Hot Spot #2: Employee classifications.
Tax Time Hot Spot #3: Home office deductions.
Tax Time Hot Spot #4: Large-sum miscellaneous deductions.
Tax Time Hot Spot #5: Mingling business and personal expenses.
"The various tax software programs have really made filing taxes much easier. However, BSCs must always remember that they still must have all their records in order for these programs to work," Schaffer added.
Click here to read the release in its entirety.