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Got the scoop on my tax outlook for the year...advice is needed:
If you had 15 days to reduce some of the money you will be owing come April, what would you do, buy, invest in etc?
There is not much overhead in an online business, all creative, legitimate ideas welcome.
I never thought I would see the day where I actually was required to spend money.
With accrual, a sale, for example, is treated as revenue when it is completed, not when you receive or deposit the check. We're a "normal" C corp (U.S.) and use accrual accounting. There's not much that can be done at the last minute. At best, you can squeeze a few bucks of income from this year into next.
I do get a year end bonus, which generally wipes out most of our corporate tax liability. Of course, I have to pay high personal taxes on it as additional income.
My rule: nothing is worth the agony of an audit. We stay pretty far back from the line.
Talked to a tax guy today. He says: "filing a return is like your best offer".
He's been in independent tax biz for 10 years with a 5 partner firm (40 people) doing thousands of biz tax returns a year. They have seen 1 audit in that entire time. The odds of a small biz audit hands on? 1 in about 3 million.
The average self employed or small business person ( les than 100 employeess can count on being audited around once in 12 years ) ..once in 5 years if less than 5 employees ..
you need to keep your paperwork for 30 years ..!
Turning someone in to the taxman gets you 10% of whatever the taxman gets from them ..the individual taxman gets 10% also of the recovered penalty ..
( I know this cos a very very good friend is a taxman here ..France ..I have seen the paperwork to back up what I say )..on more than one ocassion ..plus it is acknowledged on govt websites ..
Metermaids get 15% of the ticket ..cops get 10% of the speeding fine etc ..
I could continue ..just count your blessings :)
We use a small but very reputable CPA. I'll guess the IRS looks at who does the returns when they decide whom to audit. Some small time tax preparers are really sleazy.
joined:Oct 25, 2005