Will I get audited claiming $15,000 business income?

Will I get audited if I claim to make $15,000 as a hairdresser?

There is no way to predict. What usually triggers audits is not how much income you claim but how much expenses you deduct against this income. For example, if your business income of $15,000 is offset with $3,000 of business expenses such as advertising, supplies, and utilities – you should be fine. If, however, your expenses are $12,000 against the same $15,000 income, you are much more likely to raise the suspicion of the IRS. And if you claim expenses of $25,000 which is higher than your income – then you are begging for an audit.

But what if this is your real situation – expenses are more than what you make, and your business is losing money? Well, you may get audited. You will have to prove all your expenses and explain to the IRS why your business was not successful.

One more thing. You cannot simple “claim” $15,000. You must claim what you really made. If you worked for a barber salon, they will send you form 1099-MISC, and they will also send a copy to the IRS. There is no way to hide this income. What if you worked for yourself and were paid in cash? Yes, it will be hard for the IRS to catch you cheating, but they still have tools to do so. Better be honest now than sorry later.

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