The IRS is becoming increasingly vigilant about closing the Tax Gap. They are checking small businesses to make sure that all income is reported and that deductions are legitimate. And more. Learn about six areas the IRS pays careful attention to and how to minimize your chances of being audited for these practices.
Keeping good business records can help you find what you need with minimal hassle, but more important those records will be needed to support your tax deductions and avoid problems with the IRS. Read about how to set up a simple and painless business record keeping
The IRS looks carefully at business people who claim home business deductions, to be sure they aren't taking excess deductions for items that are really personal expenses. Learn more about the process of taking a home business space deduction so you can be sure to keep within the IRS guidelines.
The IRS requires that you pay your corporate officers and executives a "reasonable" salary. You cannot avoid paying payroll taxes (Social Security/Medicare) and other taxes on these salaries by trying to treat them as returns of loans or payment of expenses. Here are some suggestions for determining a reasonable salary for yourself and other company executives and officers.
You can hire your children to work in your small business (not a corporation), but you must follow some guidelines set up by the IRS and by state employment agencies. Read more about these guidelines.
Many legitimate businesses start out with a loss their first few years. But the IRS expects that a legitimate business will be set up to make a profit, not just have a hobby. Here are some ways to ensure that your business is considered legitimate, so you can deduct business expenses and take business losses off your taxable income.
The biggest mistake most small business owners make is not separating business activities and finances from their personal finances. Here are some reasons why you should not mix business and personal as well as tips for keeping the two separate.