New Business

[Hosuorji]

My audit risk is medium due to me opening a new business.

[ColeenD3]

Yes, that sounds accurate. There is more room for both mistakes and for claiming expenses you might not be entitled to when you have your own business.

[Rick19744]

Don't lose sleep over that rating.  

The IRS is understaffed and audit rates have been declining for years.  This doesn't mean that you won't get audited, it just means the chances are slim.

Having said that, the key here is to make sure ALL income is reported, especially income in which you receive a form 1099; which avoids a matching notice and additional scrutiny. Additionally, make sure that all expenses are legitimate business expenses.  Many test the boundaries in this area, so just make sure that should you be audited, you are able to support your expenses for your trade or business.

Keep in mind that you aren't preparing your return based on your chance of being audited.  You are preparing your return to be as accurate as possible.

See this link for IRS publication 334 if you have not already read through it.

https://www.irs.gov/pub/irs-pdf/p334.pdf