Tax Issues for Business Owners
If somebody pays me – it is income, subject to taxes. If I pay somebody – it is business expense which offsets income. Right? Not really. The tax law is the opposite of simplicity, and deducting business expenses is a perfect proof.
On the Internet, you can find plenty of lists like Top 50 overlooked business deductions or Complete list of everything you can deduct. But in reality, these lists are often misleading or even risky. I suggest a universal 4-step approach instead.
This must be why they pay no taxes, right? Maybe. The point of this article is to illustrate that so-called “complete honesty” is impossible on a tax return. I will discuss at least three reasons why I am not afraid to make such controversial statement.
This article was written in my home office. Very convenient indeed: no traffic, no gas, no jacket. Can I also get some tax deduction? The answer as a typical lawyer’s answer: it depends. There are at least 3 conditions to meet.
Who likes to receive those 1099s? They are painful reminder to pay taxes on money we already spent, and they put us on the IRS radar. On the flip side, if someone worked for you, you may have to create those 1099s and send them to your contractors, professionals and vendors.