Comedian Jerry Seinfeld gives us a glimpse into his own IRS tax audit on this stand-up sketch, which appears at the end of a Seinfeld episode.
He’s right: tax audits are not pleasant. Watch the video for a lighthearted take on tax audits:
While you or I can do nothing to completely remove the chance we won’t someday be audited, there are some basic things we can do to make the process less painful, and less costly.
A basic tip, that many folks ignore, is to keep very good records to document any business expenses or home deductions.
What do I mean by “good” records? I mean that they should be complete and well organized, not the shoebox method of accounting that so many small businesses use.
While this may sound simple, it actually takes real effort to organize your tax documents. This is a task none of us want to do, but it’s best if we do it anyway as it will always help you in the long term.
This is another one of the “joys” of being a United States taxpayer. Thanks IRS!