Budget shortfall

The day started out nicely when I made the choice to ride my motorcycle this morning because the phone said the temperature was 20º. When I got outside and all hooked up I thought, it's not that cold out here today. It was cold enough to have a constant battle with the helmet face shield fogging up. If I opened the front vent it was a blast of freezing air, closed the fogging bordered on dangerous. When I got up to highway speed things cleared up a bit. I noticed the outside temp at a local machine shop with a fancy LED sign read 25º, that was more like it.

In the mail today I received a Maryland Tax Audit notification. This isn't the first time I have been audited by the MD tax authority so I wasn't startled or any other emotion that is generally associated with a business tax audit. The form letter says that I need to contact the listed auditor by January 12th to arrange a mutually acceptable date and location for the audit to be conducted.

Some details in the letter struck me as odd - "...the State conducts audits of several thousand employers each year." SEVERAL THOUSAND!? Really, as in more than 3,000 audits per year? Your auditors must really be efficient, or you actually mean to say that you audit a few thousand employers and we singled out your company because we have audited you in the past and walked away at a net loss. We figured we'd double down to see if we can catch you slipping up on any of the tax payments these past two years.

"...to ensure employers' compliance with Maryland's Unemployment Insurance Law..." this one is most likely accurate and true. The unwritten theme is that governments are having budget shortfalls and we have found spending more on audits is worth the investment because sometimes we hit pay dirt.

Speaking of taxes and audits, I was working on the Federal W2 and W3 filing when I got the mail with the news. I've been working the last two days getting the end of year tax filings completed. For the employees out there that don't deal with taxes but once a year, consider yourself lucky, it's time consuming and sometimes difficult. I should be finished up the end of year tax forms and deposits by the end of the day on Wednesday. I finished the W2's by the end of work today, which is always a good feeling because I've noticed a lot of vendors over the years that had a difficult time of meeting a January 31st deadline, year after year. It helps that I'm not running a Fortune 500 company, but it still makes me feel good.

The last tax audit I went through was a MD Sales Tax audit that lasted a day and a half. Since I knew nothing of the audit process I was sweating bullets for two weeks, before getting to the table realizing that I was not who they were looking for at all. I was 99.5% compliant and they spent more money auditing me than they walked away with. It was a valuable learning tool that has prepared me for this next round. I'm not loosing any sleep over an audit this time, I have a vacation coming up anyhow.