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Jean's Business Law / Taxes: U.S. Blog

By Jean Murray, About.com Guide to Business Law / Taxes: U.S.

Two Thirds of U.S. Businesses Pay No Taxes - How Can They Do That?

Saturday August 16, 2008

The General Accounting Office has published a report that shows that two thirds of U.S. businesses paid no taxes between 1985 and 2005. In other words, these businesses have managed to account for enough legitimate businesses expenses that they show no profit for taxes. How can that be?

One thing people forget is that in order to to pay no taxes, you (your business) must spend enough money to have no profit. And you have to spend the money on legitimate business expenses. Sure, some of those expenses can benefit you - like company retirement plans, health benefits, and compensation for owners and employees. Those benefits may be an important reason why you have a business in the first place.

Just make sure that all of your deductions are legitimate. Check out the "Deductions A to Z" article for a list of business deductions.

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