Message Font: Serif | Sans-Serif
No. of Recommendations: 0
<You might want to stop being quite so aggressive with your business deductions -- give yourself an income so that you can use it to save and invest. Sure, you'll pay taxes on it -- but in the long run your financial situation will be much better.>

Maybe one of our tax pros can comment on this situation. Isn't a persons future SS income stream based on reported salary? If one does not have anything reported despite working for many years they will not get very much in benefits later. I know that SS is going to be a mess in the future, but I feel confident that it will survive in at least a modified version. Isn't it short sighted to ignore this point?

Also, doesn't this raise a potential red flag leaving this type of business person open to a future audit? How much latitude does one have in offsetting business income with business expenses? It seems that once a business gets past it's start up phase there should be some real net income at least periodically. If not, I do not see how it could remain a going concern. If one has other income from investments to live on they can afford to work a break even or net loss business. Of course one could also ask why do that year after year? Obviously if one consistantly underreports income or overstates deductions they are commiting tax fraud. Do any of our tax preparers do returns for businesses that always manage to lose money?


Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.