Flagged by TurboTax for High audit risk because of lower side business income, small business loss, and educational expenses.
I just finished my TurboTax form and the program flagged my tax return as being a high audit risk because:
* My side gig had significantly lower income this year. That's because I cut back on the side businesses because my W-2 job took much more of my time (currently working between 50-75 hours per week). As of this year (2024), I intend to stop the side gigs altogether, as they only made around $500 last year, compared to several thousand in prior years. Again, it's because I am working way more hours at my main W-2 job.
* I also had a small loss at one of the side jobs becase I spent more on business expenses than I made (those expenses included a monthly Quickbooks subscription which tracks my miles and expenses. It's a holdover from the previous year.)
* My educational expenses were high, but the two schools that I attend part-time charges a lot per credit hour, and it's on the quarter system.
In light of the audit risk, I plan on paying for Turbotax audit defense. I think it is worth it and I can afford it because I am getting back over $1500 from my returns.
Does this sound like a good strategy?
