{"id":127,"date":"2019-10-04T05:47:44","date_gmt":"2019-10-04T04:47:44","guid":{"rendered":"https:\/\/kleosafrica.com\/blog\/?p=127"},"modified":"2023-11-10T05:02:08","modified_gmt":"2023-11-10T04:02:08","slug":"staying-on-good-terms-with-the-firs","status":"publish","type":"post","link":"https:\/\/kleosafrica.com\/blog\/2019\/10\/04\/staying-on-good-terms-with-the-firs\/","title":{"rendered":"Staying on good terms with the FIRS"},"content":{"rendered":"\n

1.1     \nFile Tax Returns<\/a><\/h2>\n\n\n\n

One of the\nquickest ways to find yourself audited is to not file your tax return. It\u2019s\nbetter to extend if you must\u2014extending doesn\u2019t increase your chances of an\naudit and gives you more time to prepare your information and file a more\naccurate tax return. Moreover, if you can\u2019t pay the taxes you owe, it\u2019s still\ncritical to file your return. Out of fear or frustration, many people choose to\nstick their head in the sand if they cannot pay and decide not to file their\ntax return. The reality is that that approach will increase your penalties and\ninterest, and the penalties for not filing are worse than just not being able\nto pay. Even if you don\u2019t owe anything or don\u2019t have any income, you are still\nencouraged to file. The FIRS is like a significant other: If you don\u2019t stay in\ntouch, they will assume the worst. <\/p>\n\n\n\n

1.2     \nFile as the Proper Entity<\/a><\/h2>\n\n\n\n

Having a\nsmall business is a great tax-saving strategy, but reporting it as a sole\nproprietorship can dramatically increase your chances of an audit. Many people\nrealize that if they operate as a sole proprietorship, they are unnecessarily\nexposing themselves to liability; however, they may not realize that they are\nalso exposing themselves to a greater chance of an audit. For this reason,\nbeware of sole proprietorships and choose to file as a partnership or limited\nliability company when economically feasible.<\/p>\n\n\n\n

1.3     \nAvoid Excessive Dining, Travel, and\nEntertainment Expenses<\/a><\/h2>\n\n\n\n

Your\nexpenses should look normal and well-balanced for your income level and\nindustry. For example, if you run an online business out of your garage in the\nevenings, daily dining and golfing expenses are going to cut it. However, if\nyou are a sales representative peddling products on the road, those type of\nexpenses will appear to be standard. Be sure to consult with your tax planner\non what types of expenses and amounts will keep you out of trouble with the\nFIRS, and make sure you are reporting these expenses legitimately.<\/p>\n\n\n\n

1.4     \nAvoid Suspicious Numbers and Abnormal Items<\/a><\/h2>\n\n\n\n

Beware of\ndescriptions of expenses and line items that appear odd or are for large\namounts that draw attention because they don\u2019t make sense based on your type of\nbusiness or industry. A seasoned tax professional will recognize and alert you\nto these types of items.<\/p>\n\n\n\n

1.5     \nObserve Good and Honest Tax Practices<\/a><\/h2>\n\n\n\n

Report all\nof your income and don\u2019t plug in numbers unless you can support them. If you\nown a small business, consider having a tax advisor prepare your return, and\nalways know your own numbers. Review your tax return and discuss it with your\nplanner. Don\u2019t be afraid to take an expense you\u2019re entitled to, especially if\nyou have kept good records. But also make sure you\u2019re filing your reports\ncorrectly and that your tax return doesn\u2019t stand out. <\/p>\n\n\n\n

1.6     \nKeep Your Receipts<\/a><\/h2>\n\n\n\n

Keep the\nbest accounting records you can. It will help you produce a better tax return\nand more accurate figures, ultimately reducing your chances of an audit.<\/p>\n\n\n\n

In summary,\nyou can stay on good terms with the FIRS if you make reasonable deductions,\nkeep good books and save records of your receipts. Use a professional to\nprepare or at least advise you on preparing your tax return when you have a\nsmall business, rental properties, and\/or a more complicated tax return.<\/p>\n\n\n\n

REFERENCES<\/strong><\/p>\n\n\n\n

Mark J.\nKoehler \u2018\u2019The Tax and Legal Playbook: Game-Changing Solutions to Your Small\nBusiness Questions\u2019\u2019 (2015: Entrepreneur Press)<\/p>\n","protected":false},"excerpt":{"rendered":"

You can stay on good terms with the FIRS if you make reasonable deductions, keep good books and save records of your receipts. Use a professional to prepare or at least advise you on preparing your tax return when you have a small business, rental properties, and\/or a more complicated tax return.<\/p>\n","protected":false},"author":1,"featured_media":128,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[7],"tags":[44,43],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/kleosafrica.com\/blog\/wp-json\/wp\/v2\/posts\/127"}],"collection":[{"href":"https:\/\/kleosafrica.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kleosafrica.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kleosafrica.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/kleosafrica.com\/blog\/wp-json\/wp\/v2\/comments?post=127"}],"version-history":[{"count":1,"href":"https:\/\/kleosafrica.com\/blog\/wp-json\/wp\/v2\/posts\/127\/revisions"}],"predecessor-version":[{"id":129,"href":"https:\/\/kleosafrica.com\/blog\/wp-json\/wp\/v2\/posts\/127\/revisions\/129"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/kleosafrica.com\/blog\/wp-json\/wp\/v2\/media\/128"}],"wp:attachment":[{"href":"https:\/\/kleosafrica.com\/blog\/wp-json\/wp\/v2\/media?parent=127"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kleosafrica.com\/blog\/wp-json\/wp\/v2\/categories?post=127"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kleosafrica.com\/blog\/wp-json\/wp\/v2\/tags?post=127"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}