Ah, taxes. A mandatory thorn in your side. What to expense, what to allocate, what to deduct and what to account for… it's quadruple the headache for an entrepreneur.
If you are an entrepreneur who gets your taxes done for you, you're not in the clear as you still have to gather all your statements and receipts. And for those small business self-TurboTaxers out there, here are some tips to prevent getting audited:
- Just because you are wearing your company tshirt to the gym doesn't make your Gatorade purchase a business expense!
- That fancy weekend home you rent? Even though you plan to dream about your business there, it is not an expense line item.
- And how about those groceries you bought in order to keep your sustenance for the big investor meeting? Nice try, not deductible.
- Those antidepressants you are taking because you just lost your biggest client? Nope, Uncle Sam will not approve.
- How about those toys you bought to make up to your son when you missed his game because you were working? Good one, but not happening.
- And then there is home theatre system that you bought to unwind after a long day of work? Negative!
Just to be on the safe side, if you have any doubts, run your taxes by an accountant! It may save you some pain in your Audit nerve in the long run.
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