audit risk

Forum|Forum|1 year ago
March 7, 2025
1 reply
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My self-employment income (1099 NEC) is under $50K and my deductible business expenses are under $2K. But TurboTax says my audit risk is higher (medium) because my business expenses EXCEED my business income, which obviously is not true. Is this a glitch in the program? I've checked my entries and they are correct.

Vanessa A

If you are seeing a net income from your business of around $48,000 (with income of $50k and expenses less than $2k) then you can just ignore that warning. It is not part of your return. The most important thing is that the numbers on your Schedule C are correct and if you have double checked the entries, and looked at the form, then everything is good.

However, do be sure to look at your Schedule C and any other employment related deductions like health insurance or retirement contributions prior to submitting to be sure there is not an error in entry anywhere. If all is good, then you can just ignore that warning.

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