Silverwood-Bookkeeper LLC

The 7 red flags are: 1) Large Miscellaneous expense categories, 2) Consistently reporting a net loss, 3) Round number deductions, 4) High lifestyle expenses relative to income, 5) Misclassifying employees as contractors, 6) Negative cash flow while showing a profit, and 7) Unreconciled bank accounts.

In an audit, the burden of proof is on the taxpayer. If you cannot produce a receipt or clear ledger for a deduction, the IRS will disqualify it and charge back taxes plus interest.

Ensure your pricing reflects your Labor Burden and overhead so the business can eventually turn a profit.

Use receipt-capture software to record the exact transaction amount, including cents, rather than rounding to neat numbers.

Use the Common Law Rules (Behavioral, Financial, and Relationship) to determine whether a worker is an employee or a 1099 contractor.

Perform a bank reconciliation at the end of every single month with no exceptions to ensure your QuickBooks balance matches your bank statement.

A Certified QuickBooks ProAdvisor possesses in-depth knowledge of all QuickBooks products and provides the highest level of proficiency in setup, cleanup, and ongoing management.

Silverwood-Bookkeeper LLC specializes in providing bookkeeping and payroll services for small businesses and startups.