Sharapova & Co. - Accounting & Tax Advisory

“100% business use” is the vehicle deduction claim that gets people audited. If you commute or run errands, it’s not 100%—and without logs the IRS can cut the deduction and even recalc depreciation. Save this.

The IRS is running selection models designed to find returns that are most likely to contain errors that increase what you owe — not the errors that help you. The audit process exists to protect tax collection, so the system is built to surface additional revenue, not refunds you “forgot to claim.”

Here’s how returns usually get selected:

Statistical scoring (DIF models): your numbers don’t “fit” what the model expects for your income level

Mismatches: W-2s/1099s don’t match what you reported

Deductions that exceed norms: write-offs look unusually high compared to income

Prior audit history: a past audit with a big deficiency can increase future attention

Random selection: rare, but real

And timing matters:

Most individual audits happen within about 2 years after filing, but a return can be examined anytime before the statute of limitations expires.

If you want the simplest “audit-risk filter”:

Anything that’s out of pattern + hard to document is where people get hurt.

The “travel/meals/supplies” shortcut is an audit trap. Category labels don’t make personal spending deductible—audits reclassify it fast and the bill gets expensive. Save this before tax season.

AI doesn’t need to “prove intent.” It just flags what doesn’t add up—and sends it down a review path. The IRS will focus on the most profitable discrepancies first. 📌📌Save this before you file.

If your return is “out of pattern” and hard to prove, it’s exactly what audit models look for—because it’s likely to generate money for the IRS. Not random.

📌Save this before you file.

“I work from home sometimes… can I take the home office deduction?”

Here’s the line most people miss:

Home office isn’t “I sometimes work at home.” It’s a deduction with specific rules.

In plain English, the space generally has to be:

used exclusively for business (not mixed use)

used regularly for business

and function as your principal place of business (or the place you do core admin work / meet clients when you don’t have another main office)

So… laptop on the kitchen table? Usually no.

A dedicated room used only for business? Often yes—if the facts and documentation match the claim.

Home office deductions are legitimate.

But “a little bit of the whole house” without a real setup is how deductions get disallowed.

🔖Like and save this post for later, and follow for more strategic tax insights.

“My car is 100% business use.”

That sentence is one of the biggest audit magnets—unless it’s actually true (as in: no personal driving, ever).

Because the IRS doesn’t care what percentage you claim.

They care what you can substantiate.

What “100% business” usually looks like in real life:

you commute
you run errands (grocery store, pharmacy, etc.)
you drive kids to school
If there’s personal use, it’s not 100%.

What protects you:

a mileage log (date, destination, business purpose, miles)
clear separation between business vs personal use

What can happen in an audit:

the IRS may reduce your business-use % (say, to 60%), then scale down your mileage/expenses and even recalculate depreciation accordingly.

A realistic percentage with clean logs beats an aggressive claim you can’t prove.

One of the fastest ways to create a tax problem is also one of the most common:

Running personal expenses through a business and calling them “deductions.”

It usually looks like:

vacations coded as “travel”

family meals coded as “meals” or “marketing”

personal shopping coded as “supplies”

random Amazon orders coded as “office expenses”

Here’s the hard rule: an expense must be ordinary and necessary to be deductible.

If it’s personal, it’s not deductible—no matter what category you put it in.

And in an audit, this backfires fast:

disallowed deductions → higher taxable income → tax + penalties + interest.

A business isn’t a magic vacuum for personal spending. Mixing life + business is how “easy write-offs” become expensive corrections.

Most clean-energy projects earn valuable tax credits.

But many never turn them into actual cash.

Why? Because credit transfers require early registration, clean documentation, and a buyer-ready package. Miss one step and the deal slows down or falls apart.

Here’s the simple 3-step framework to turn credits into cash:

1️⃣ Register early
Pre-filing registration is required before selling the credit. Waiting until tax season can cost you a full year.

2️⃣ Build a buyer-ready evidence file
Qualification proof, bonus eligibility, commissioning documents, invoices, cost support, and a clear summary. Clean files close faster and protect value.

3️⃣ Present a ready-to-sign package
Make diligence easy. Clear structure, fast answers, and defined protections increase confidence and speed.

If you have recent or upcoming projects, now is the time to structure them correctly.

📌 Book a 30-min call

We’ll walk through your recent and upcoming projects and outline how much credit value you could realistically turn into cash — and what needs to happen next.

🔔Like and save this post for later, and follow for more strategic tax insights this tax season.

K-1 shows $40K loss… but you can only deduct $35K? That’s basis rules. Stock + remaining shareholder loan basis sets the limit, and the rest gets suspended. Basis tracking is the difference between “loss on paper” and “deduction allowed.”

Contractors: stop losing deductions before tax season even starts.

Most contractors don’t overpay taxes because they “made too much.”
They overpay because their paperwork isn’t tied to the job—so at tax time, everything turns into guessing.

Here’s the simple system that keeps your money in your pocket:

Keep POs/estimates + receipts linked to each job. Link it now, not later.

Track mileage weekly (date, site, purpose). Reconstructed mileage is where deductions disappear.

Collect a W-9 before you pay any subcontractor. January panic is preventable.

Maintain a W-9/1099 tracker so 1099-NECs don’t become a January panic

Keep a simple project statement per job (income + costs + margin). No folder = no proof.

If your receipts are in a shoebox and your mileage is “in your head,” you’re not doing taxes—you’re gambling.