Your change in audit risk may have to do with the fluctuation of income. Regarding what to do if you were audited, having your receipts and other supporting details to prove what was reported would be the main details to have maintained in your records.
Details to check would include such things as:
- any tips reported,
- any mileage claimed for the 7 months she was working,
- that the estimates were reported for the right year,
- that all state details are included, and
- that supplies expenses were accurate.
- It would be expected that all expenses directly related to sales would be lower even if the landlord still required her to pay rent during some periods.
Reporting PUA received or estimates paid would not flag an audit by themselves.
If you were to get audited, if you had purchased support for audits, TurboTax can help. See: What's the difference between the Audit Support Guarantee and Audit Defense?
For more information, see: What the Coronavirus Relief Means for Self-Employed Taxpayers
Tax Guide for the Self-Employed: Everything You Need to Know
