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Run your business ethically, and legally.

This means you report all reportable income and pay whatever taxes are due on it, after taking all deductions and credits permitted.

Being creative and aggressive in tax matters is fine. Tax evasion which violates the law (such as not reporting some of your cash income, which is what you seem to be implying as an option--my apologies if I misinterpreted your post)is not fine.

If the tax bite bothers you, there are perfectly legal and ethical ways of shifting income from one tax year to another, some of which you may be able to use. Or, you can take that money and actually use it to grow your business, such as investing in new technology, which for a small business should be 100% deductible in the year of the expenditure.

Another thing you may not be aware of, but looking at the big picture, you are better off reporting higher gross and net income on your tax return than lower. If you ever need a bank loan to expand your business, they look at things such as your tax return. Higher income is better than lower.

But the main reason to not cheat on your taxes, if that's what you're contemplating, is that whatever you gain by doing so (a few dollars at most), is not worth the loss of your personal integrity.
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