The IRS Never E-mails
Leave a CommentFrom time to time a client will forward an email to me – they are unsure whether to respond. It looks like it’s from the IRS, it acts like it’s from the IRS – it wants money (just like the IRS), or better yet – wants to GIVE you money – only guess what? It’s NOT from the IRS. It was never from the IRS. The IRS will never email you about taxes due, information they need or any other thing. They use the mail only. So the next time you see an email from the IRS you have 2 choices -
- Delete without reading
- Forward without reading to the IRS at phishing@irs.gov
Save yourself and your friends by letting them know that the IRS NEVER EMAILS!!!!
NO. 8 Deducting more than 50% of meals when travelling out of town for business
A commonly misunderstood deduction is for meals when travelling for business out of town. These meals are only 50% deductible. I have had this conversation many times with students in my teleclasses or when I am out speaking. Many, many years ago these meals were 100% deductible – but not anymore. If you do much travelling for business, save yourself from this costly mistake. There are a lot of things you can do right when travelling out of town for business that you might miss – if you think you have more to learn, go check out my course on Travel, Meals & Entertainment. You’ll find it here on the link below (but you’ll need to scroll down to see it) As a special deal for you – I just realized we have not changed the posted price – It was to go to 19.95 after the live call – but you can get it now for only 15.95
No. 7 Failure to understand the Hobby Loss Rules
Many factors go into the determination of whether you have a business or a hobby. Did you know that there is NO rule that says if you have losses in 3 out of 5 years, your business will be treated as a hobby? IRS does say if you have income in 3 out of the last 5 years, your venture will be considered to be a business. There are many factors that the IRS considers in determining if you have a business or a hobby. Here is just one factor (there are others) Do you carry out your business in a business like manner? This means keeping good books and records, receipts, and the like. I would love to hear from you – is this a topic that worries you or your friends?
No 6 – Failure to Take the Home Office Deduction
As a follow up on No. 5 where we talked about “fear of red flags”
Failure to take the home office deduction is one of the most common fears I see that home based business owners have. But even if you have an outside office and you do your administrative or other aspects of your business at home, you may also qualify for this deduction. If you use a part of your home regularly and exclusively for your business – you are entitled to take a home office deduction. And you should – Congress wouldn’t have written this into the tax code if they didn’t want you to take the deduction. Find out more about the home office deduction today.
No. 5 – Fear of Red Flags
Filed under: 25 Random Things Business Owners Miss on Taxes, Sales |
Leave a Comment Fear of red flags
This is where a business person may fail to take legitimate (keyword there: LEGITIMATE) tax deductions. I have encountered many people at my seminars and also potential clients who are afraid they’ll be audited if they take certain deductions. There is no single category of deduction that would generate an automatic audit. Let me repeat that – there is NO single category of deduction that will generate an automatic audit.
All you are doing when not taking a deduction that you are entitled to take is paying more tax. That’s it. I’ll be posting more on this later. In the meantime, if you are not taking deductions because you are worried about red flags, I encourage you to educate yourself about what tax deductions are available to you and what qualifies them as legal for you to take.
A great place to start is the Deduction Diva Tax Organizing System (and all calls on the Featured Products page)- on sale for a few more days only – for a tax deductible $89.95 – you get a tremendous education in easy to employ, legitimate tax strategies. Learn more here:
NO. 4 – Failure to make a proper election when writing off asset purchases
Filed under: 25 Random Things Business Owners Miss on Taxes |
Leave a Comment Failure to make a proper election when writing off cost of asset purchases
Known in the tax world as “electing Sec 179″ you must separately state the cost of asset purchases such as computers, furniture, equipment, etc. and show on Form 4562. Many taxpayers improperly include these assets as office supplies. This happens because people know they can write them off – the danger is in failing to make the election on the proper form. On audit, the deduction can be denied if improperly expensed.
It’s not in my nature to focus on the negative – but this is tax time and for those of you who are do-it-yourselfers when it comes to tax preparation – I want you to be aware of the mistakes I see.
Yikes – I forgot something in yesterday’s newsletter
I forgot to remind everyone about the two teleclasses coming up on March 1st and 2nd. If you haven’t heard about the tax benefits of paying your kids, you’ll want to click on the link and see what you’ll learn on the March 1st teleclass. At $19.95, it’s kind of a no brainer to find out how you can shave potentially $1,000’s off your tax bill every year.
