Business Income-Related Red Flags

🚨 Nobody likes getting love letters from the IRS.

Even if you’re doing your best to stay compliant, there are a few income-related red flags that can trigger unwanted attention—and stress you don’t need. Here are the top things we see that can set off alarms (and how to keep them from blowing up in your face):

💸 Forgetting about side income or payment apps

Stripe, PayPal, Venmo, and Square are all snitching to the IRS now. If you're only counting what lands in your main account, you're likely missing income that’s still very much reportable.

🏦 Your deposits don’t match your reported sales

If your bank shows more (or less) than your P&L, it raises eyebrows. Sloppy tracking, missing invoices, or commingled funds can make it look like you're underreporting—even if you're not.

📉 Lots of write-offs, barely any income

We love deductions, but when the ratio is off, the IRS takes notice. Your expenses should reflect a real business, not just a hobby with a spreadsheet.

📊 Your income bounces all over the place

A big spike or dip without a paper trail to back it up? That’s an audit waiting to happen. Keep clean records and a clear narrative. We help clients tell that story before the IRS comes asking.

🤹‍♀️ Mixing personal and business money

Depositing your birthday money into your biz account? Not a great look. Keep things clean and documented, or risk making your books a nightmare to defend.

🧾 Inconsistent numbers across your filings

Your tax return, bookkeeping, and financial reports should all be singing the same song. If they’re out of tune, it could mean questions, penalties, or worse.

💵 Cash-heavy biz and no tracking

If you’re in beauty, retail, hospitality, or any cash-loving industry, the IRS is already paying closer attention. Missing records or “estimated” totals? That won’t cut it.

If the numbers are off or things aren’t tracked clearly, it can look worse than it is. And that’s where we come in. Need a second set of eyes on your books? Let’s get your numbers clean and audit-ready, without the stress.