Filing a Schedule C for self-employment income triggers more IRS scrutiny than other returns. Math errors, especially from handwritten forms, and suspiciously round expense figures like $3,000 for travel are red flags. Incomplete returns almost guarantee an audit.
So first one, filing a Schedule C. The reality is tax returns that have a Schedule C compared to tax returns that don't get audited more often. Math errors, surprisingly this still happens a lot. Now if you're using a tax software, this shouldn't happen. But sometimes it does. But if you're not using a tax software and you're filling out the forms by hand, honestly, I've never seen someone do that without getting a math error letter back from the IRS. Using round numbers. So sometimes I'll ask a client, hey, I need your business profit and loss statement, so I need all your income, I need your expenses. And they'll come back and give me their profit and loss statement, and all their expenses end in 00. Oh yeah, I spent $3,000 on travel, I spent $4,000 on food, $6,000 on office supplies. Look, I know that they know that I know they made up those numbers, and if me and the client know that, the IRS knows that too. And then submitting an incomplete tax return. If you are missing something, that is almost a guaranteed way for the IRS to audit you. But I think it's always a good idea to get some tax professional advice, even if you want to file your return by yourself. And remember, the IRS doesn't care if you're not a tax professional. They will come after you if you make a mistake.
