Having an average income for one year and then hitting over 330k the next year will also raise a flag for those of you that jumped into AM and left your day job only to hit it big within the next tax year, this big increase looks very suspect and raises your chances. Also, losing a ton of money does the same thing.
One thing that I think has been very helpful for me in avoiding being audited is to keep everything within 10 % from year to year. What I mean by this is try to keep your deductions within 10% + or - of what they were last year.. Now thats not to say if you have legitimt changes you shouldnt report it because you should, but what I am saying is if you take an aggressive approach to finding "deductions" a 10% increase or decrease would be "aggressive" . I am not suggesting you dont report your 30k income that went to $300,000 (thats how they got Capone) you need to declare that income. However your deductions will be higher as well so your actual Income wont be anywhere near your Gross Revenue.
. Its 100x better to just write off mileage then trying to buy a car and do it over the amount of years needed for its value.
This is spot on. The mileage deduction is almost .40 cents a mile and can really add up. This is usually one of my biggest deductions. You can find all kinds of excuses for business. If your going to claim the mileage (you really really should) keep a few things in mind.
1. Keep a written mileage log (this is the first thing the Auditor will ask you for) and if you don't have it your fucked (can you say penalties and interest) so just right down where you went, who you saw and how many miles you went.
2. You can not count your "commute" to your 1st and last stop of the day no matter how far they were. So you should always stop at the Post Office on the way to work (if its like a mile or less from home otherwise find something "business" and then stop at the Bank on the way home (again this is an example find something close to home)
3. Its really helpful to have a 2nd vehicle thats available for non working hours. This helps with the audit thing again. This can be wife's car or a $100 better car you register just for this purpose ( you dont have to really drive it, IRS just thinks you do)
4. Write down your beginning of year miles on your vehicle and then again at the End of year. (if you dont know last years make a best guess)
5 Split those total miles between business and personal you will need these totals for your Tax return. I really like to keep my ratio at 25 to 30% personal millage (non deductible) and the rest can be business.
Just remember that when you deduct millage thats all you get no gas,repairs, or maintenance can be deducted. But don't worry you will be way better off.
Now I know a lot of guys will say but I work from home and dont drive any where. So here are some potential trips for a Aff Marketer
1 Conferences ie.. Affiliate Summit
2. Local Business for Prospecting for SEO services
3. Networking meals and meetings.
4. Client meetings (Attorney and CPA counts)
5. Supplies runs and all kinds of other stuff.
I know this was kind of a long post but I think its something that might help out a little bit and just might save you thousands of dollars. Again I am not a CPA but I do have a 100% zero audit record so just going off of experience.
