Browse Tag by Internet Entrepreneurs

5 Surefire Ways to Get Audited by the IRS

You’re an honest entrepreneur. You run your small business with integrity; you don’t cheat your customers, and you go the extra mile to make sure they’re satisfied. You keep meticulous records, and you work with a qualified accountant and tax professional to make sure you’ve got all of your business’ tax records properly organized and identified.

Yet, even with all of that preparation and good intention, an audit can still happen. When it does, the burden of proof is on you; you need to be able to demonstrate that every expense is legitimate, and answer for every source of income.

There are some specific elements on your tax return that are likely to trigger an audit by the IRS. While we can’t be sure about all of the factors that go into the decision, here are a few that are especially likely:

Request large tax refunds, year after year

This is one of the elements that the IRS uses to flag returns. The IRS uses a computer algorithm to assign a score to every person and business, with a higher score meaning a higher likelihood of having an error. The most common element that triggers this algorithm is having a large tax return every year.

In many cases, these large returns are legitimate; you might have several children, for example, or you might have taken advantage of specific tax rebates, credits, or incentives.

The best way to avoid a large tax return is to make sure you’re not overpaying throughout the year. If you file quarterly taxes, estimate what you owe on the low side. If your spouse works outside of the home, ask him to lower the amount of withholding in his check.

That doesn’t mean you should purposely not take deductions or credits, of course; just understand that doing so year after year can, eventually, lead to an audit.

Show a high ratio of expenses to revenue

If your business is making money but just barely, this sends a message to the IRS that something is probably amiss. If you have a business loss for several years in a row, for example, the IRS considers what you’re doing a hobby rather than a business.

Look at the ratio of expenses that you’re claiming for your business compared to revenue. If it leaves little profit, or even large profits but little in proportion to expenses, you’re likely to trigger an audit.

The best way to avoid this is to track the ratio of expenses to revenue closely. After a few years, there should be an ever-widening gap. If not, you may find yourself sitting across the table from an IRS agent.

Have significant changes from one year to the next

 One thing the IRS system looks at is consistency. It operates on the assumption that each individual or business is going to be in a similar situation, from the tax perspective, from one year to the next.

This isn’t always realistic, of course, but it is a statistical probability. If your business suddenly takes off, takes a nose dive, or if you radically alter your business such that it dramatically changes all of your tax-related metrics, it could trigger an audit.

Provide incorrect data

Providing incorrect data regarding your social security number or the social security numbers of employees or family members can trigger an audit. Forgetting to report, or incorrectly reporting, information from a W-2 or 1099 will do the same.

This is one of the easier mistakes to avoid. Go through your tax return, line by line, and make sure that every number matches up the way it’s supposed to.

Not paying your tax bill

If you send in a lower amount than what you actually owe in taxes without offering an explanation, you’re probably going to face an audit. The IRS is going to do a more complete investigation of your tax return.

You can avoid this by filing a Form 9465 along with your tax return. This form is a request to pay your tax bill in installments. You’ll still be facing some fees and penalties for paying past the due date, but you’ll be able to pay off your tax burden over time – and avoid triggering an audit.

Even if you’ve been completely honest on your taxes, an audit can cost you. The burden of proof is on you, and so in many ways you’re at the mercy of the IRS. Don’t give the IRS a reason to look more closely at your taxes. Avoid these triggers whenever possible.
[IMAGE CREDIT: Some rights reserved by Images_of_Money]


5 Ways Internet Entrepreneurs Can Boost Their Online Presence

Creating a presence online is not easy, but there is no reason why it is impossible to do so. All it takes is a little intelligent planning for getting your voice across. You need to build a powerful presence so that you have a devoted community that will help spread your word. So before we move ahead, we assume that what you want to share is actually worth spreading.

Here are 5 ways entrepreneurs can boost their online presence:

Take Time Out To Analyze Your Competition

Your online presence or impact is relative to the presence that your competitor has generated. So if you take time out to analyze your competitors presence, you can get a good idea about the ground work that you need to catch up with. Check what sites link back to them and understand what keywords are clicking for them.

Connect with Real People on Social Network

Many internet entrepreneurs and bloggers make the expensive mistake of mass marketing. They would prefer to spend hundreds of dollars on softwares that promise to generates thousands of followers. Although, they may end up with many followers – few to nil of them would actually be clicking through your links. Most of them would be spam accounts that are worth nothing. Your main focus should be on getting followers who are actual people. Getting fifty followers who actually give a damn about what you write is much more preferable than 1000 followers who would simply add numbers to your Twitter profile.

Take Your Brand Seriously

Focus on building a brand from Day 1. A brand defines the real character of a company or website. An intelligent internet entrepreneur can leverage good brand value to create a strong presence online. If your readers and visitors develop a strong affinity to your brand then you will find that your task of creating an online presence becomes much easier.

Always Have A Face To Your Blog/Website

Credibility is a factor that can really make or break your online presence. And you have to utilize all available options to boost your credibility. Having a face in the about page, with a name and a little personal detail can go a long way in building credibility. Once you are a person who is recognized by a doting community – it becomes easy for you to create a powerful presence online.

Deliver The Best

This is the final tip for creating a presence online. Always deliver the best content and pieces out there.  Photos, Infographics and graphs – all add detail to your content. It helps you generate a much more quality piece of information for your readers. As far as I know, no blog or website has got popular without quality. So remember, deliver the best.

Do leave your comments below.


Internet Entrepreneurs Strip Nude For Charity Calendar

This post is late by little over a year. But when I make such amazing finds on the internet, it really does not matter. 24 London internet entrepreneurs have bared all for a charity calendar. The hot photos in this calendar were taken to break the notion of internet entrepreneurs as being “unattractive geeks”. Once you take a look at this – your mind will be blown away.

Web entrepreneurs pose for the 2010 Nude London Tech calendar, which features 24 pictures of the capital’s internet pioneers in all their glory. I have only included some of the internet entrepreneur photographs, you can check out the rest with the links that I have provided at the end of the post.

Hermione Way

Hermione Way
Hermione Way
Hermione Way, a 24 year old who runs, an online video news site. She appears in the calendar with her modesty covered using just a microphone and cable. Her blog covers all the under-the-hood technology news in the UK.
Hermione Way - Internet Entrepreneur
Hermione Way - Internet Entrepreneur

Sophie Cox

Sophie Cox
Sophie Cox
Sophie Cox has the whole world in her hands as co-founder of Worldeka and wanted to show off her fun side. Worldeka is a social network and collaborative platform for charities, NGOs, activists and policy makers. They harness social media for social good and empower their users with fantastic tools to help them connect online to create change offline.
Sophie Cox - Internet Entrepreneur
Sophie Cox - Internet Entrepreneur

Poppy Dinsey

Poppy Dinsey
Poppy Dinsey

Poppy Dinsey is the founder of Globrix. Globrix is the UK’s largest search engine for property, flats and houses for sale, rental property, flat shares and new homes. They offer property professionals a free service, hence they have the largest stock of property for sale and to rent on the market. She alsp stripped for the charity calendar. The image is shown below.

Poppy Dinsey - Internet Entrepreneur
Poppy Dinsey - Internet Entrepreneur

The charity calendar featured 24 portraits of naked techies, from entrepreneurs and bloggers, to social media buffs and search engine experts. Here is the complete list of entrepreneurs who appeared in the calendar in 2009:

Featuring 24 leading members (12 men and 12 women) of the London tech/entrepreneurial scene, including:

The calender is the idea of Milo Yiannopoulos, who is currently studying English at Cambridge. He said: ‘Someone suggested the idea as a joke, and I just thought why not. There is a perception that the people who run these internet startups are unattractive geeks, and I wanted to show that’s not the case. We are hoping to sell over 5,000, and are also working on an iPhone app.

Links for further reading: