IRS Side Hustle Crackdown: 3 Red Flags (And How To Fix Them)

Would you like to learn more about minimizing your taxes? Schedule a free consultation here: https://aba.link/r5s If you have a side hustle like an Etsy store, Uber or DoorDash driving, consulting, coaching, or selling online and you file a Schedule C, this video is for you. Learn why sole proprietors face significantly higher IRS audit rates compared to corporations and how common mistakes on your 1040 can trigger red flags. We break down IRS data on the tax gap, misreported income, and how the Discriminant Function System (DIF score) targets Schedule C returns for overstated deductions and underreported income. Discover the biggest audit triggers, including home office, meals, travel, and improper deductions, and how IRS matching systems track PayPal, Venmo, and Stripe payments. Most side hustle audits aren’t about fraud — they’re about filing errors. Show Notes: 0:00 Side Hustles & Why the IRS Targets Schedule C 0:45 Audit Rates & IRS Tax Gap Data 2:10 Why Sole Proprietors Lose Audits 3:40 How the IRS Finds Mismatches (1099 & CP2000) 5:10 Red Flag #1 – Home Office Mistakes 8:15 Using an S Corp & Accountable Plan 11:00 Red Flag #2 – Vehicle Deductions 16:15 Red Flag #3 – Sloppy Expenses & Hobby Losses 17:30 Separate Banking & Clean Books 19:40 The Side Hustle Cleanup Plan 21:35 Clean Write-Offs & Free Consult --------------------------------------------------------------------------------------------------------- FREE TAX & ASSET PROTECTION WORKSHOP Register for an upcoming workshop today if you want to protect your business and personal assets from snoopy lawyers and creditors. Save Your Seat: https://aba.link/181 ~~~~ CONTACT US Phone: 800.706.4741 Email: [email protected] Fax: 702.664.0545 ABOUT TOBY MATHIS Toby Mathis, Esq. is the best-selling author of Infinity Investing: How the Rich Get Richer And How You Can Do The Same. Toby is a tax attorney and founded Anderson Business Advisors, one of the most successful law, tax, and estate planning companies in the United States. Learn more at https://aba.link/tobyaba --------------------------------------------------------------------------------------------------------- WARNING: I will NEVER ask you to contact me through YouTube comments, telegram, or WhatsApp. I have a checkmark next to my name, and my comment will be highlighted. Fake accounts do not have that. Please be aware of fake accounts trying to scam you using my name and picture. The information provided in this video should not be construed or relied on as financial, investment, or legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice. #irscrackdown #sidehustle #irs