Why do people owe the IRS? Self Employed part 2

So the Self Employed can owe the IRS because they didn’t make sufficient Estimated Tax payments.

The Self Employed use a Schedule C to declare their income. Users of Schedule C are more likely to be audited than people who are paid with a (W2).

When your Schedule C is audited the IRS wants documentation to prove your business expenses. If you haven’t kept good records then expenses will be disallowed and your net income and tax liability will go up.

This means the IRS will think you owe them money that you really don’t, but if you can’t prove it they will take steps to collect.

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