SJBiz_OfficeSpace_0719_Layout 1 7 / 19 / 19 3 : 01 PM Page 1 SOUTH JERSEY BIZ OfficeSpace SUPPLIES CORNER OFFICE IN DEMAND Edited by Grace Clevenger Red Flags and Tax Audits in Cash Intensive Businesses ChargeWrite + This all - in - one tool is perfect for Be sure to keep Cash Intensive Businesses anyone who multitasks on a regular your business funds A cash intensive business is one that receives a basis , yet the sleek design keeps this gadget from taking up a lot of separate from your significant amount of receipts in cash . Think of as space . A pen , phone charger , stylus , personalfunds . When many businesses as you can that deal in cash such as storage space and more — the func - funds are mixed it is hair salons , pizzerias , restaurants , laundromats , car tions of this multi - use pen seem called “ co - mingling washes , convenience stores . Some of these businesses endless . ( ShopBKey.com , $ 49 ) offunds ” and it could handle a high volume of small dollar transactions . cause income to look Receiving cash in your business is not the Lumo Lift as if it is higher than problem — how cash is or is not accounted for in It’s easy to let it actually is , or it your business records is the problem . A process good posture fall could be viewed as needs to be put in place to ensure the cash is de - to the backburn - er when sitting poor record keeping posited and recorded as income . The question Jo - Ann Weiner , at a desk at the practices or an at - each IRS tax auditor will ask is : How are your CEO and Founder office , but the J.L . Weiner and Associates , LLC tempt to mislead . gross receipts calculated ? They will also ask if all Lumo Lift helps income was reported . prevent that Think about it — if your business gross receipts Indicators used to Justify the Auditor from hap - are arrived at by adding deposits to your bank ac - to Take a Closer Look at your pening . counts but cash received is not on deposit to the Financial Condition With a account , all income is not reported . There are several items that will trigger the IRS sensor that In addition , if expenses are paid with the cash taking a closer look at your financial condition : attaches to the back of any shirt , the not on deposit , the expense will not be allowed . • Books and records do not reconcile to gadget syncs to your phone to alert you with a reminder to sit up straight The cash must be included in income and then the your tax return if it senses your posture start to slip . expense can be allowed . Of course , that procedure • Excess unexplained deposits ( Amazon.com , $ 198.97 ) casts doubt as to the reliability of the records . • Inadequate internal controls From a practical point of view , it is very im - • Co - mingling of funds portant that there be a separation of duties • No income on deposit regarding employees who accept cash , deposit • Using cash instead of depositing it cash and record it . A fuller conversation of that • Financial activities do not appear in topic would be needed at another time . balance with your return • Gross profit changes on your prior and subsequent returns are inconsistent Minimum Income Probes Did you know that minimum reviews of your in - So , if your income is low but you purchased a come are done on every federal tax audit ? You or FiBiSonic LED Clock new Ferrari or took several expensive vacations , your representative should therefore perform a Get all the need - to - know informa - the returns will not support those activities and review of your income in preparation of the audit . tion at one glance with the FiBiSonic LED Clock . Featuring the time , date , that provides a reason to justify a closer look at Take a look at your deposits . Do they exceed re - humidity and temperature , this your financial condition . Remember , as a rule ported income ? If so , are there non - taxable items digital clock stands on any desk or cash is not the problem — how one reports it and on deposit such as loans , gifts or inheritances that surface and stays up - to - date with how it is accounted for is the issue . can be backed out of deposits ? Do you withdraw changing humidity and tempera - money and redeposit it ? Non - taxable items and ture . This device also features voice Jo - Ann Weiner is the owner of J.L . Weiner and redeposits could cause your income to look higher control functions , three brightness Associates , LLC . than it actually is . settings and two face settings . ( AliExpress.com , $ 21.50 ) SouthJerseyBiz.net | VOLUME 9 ISSUE 7 | SOUTH JERSEY BIZ | 11