I am doing some experiments.
If I make $1 profit on the Schedule C, TT says my return audit risk is low
If I make $1 LOSS on the Schedule C, TT says my return audit risk is medium
so claiming loss on the schedule C even $1 loss will have high probability to get audited?
The audit risk analysis is not an absolute or exact meter.
What your experiment found only means that reporting a loss carries a higher probability of audit than reporting a profit, everything else being identical.
Of course, reporting a loss or a profit is not the only criterion the IRS uses to select audit targets.
The audit risk analysis is not an absolute or exact meter.
What your experiment found only means that reporting a loss carries a higher probability of audit than reporting a profit, everything else being identical.
Of course, reporting a loss or a profit is not the only criterion the IRS uses to select audit targets.
Since people who are self-employed/businesses (schedule c) are usually in business to make money, claiming a loss might cause the IRS to look more closely at your deductions to see if they are out of the normal range.
While this does not guarantee an audit, it possibly could increase the chance of one.
I do taxes for myself a couple of others with Schedule C. Audit risk meter shows up on mine and not on another. I would like to see that risk. How do I trigger it since it doesn't come up automatically?
Please see the steps JamesG1 posted to trigger the Audit Assessment. @dimarcopaintingco
Solved: I saw the audit meter but now it is gone? Where can I find it ? (intuit.com)