At a presentation I gave to prospective entrepreneurs earlier this year, one of the participants asked if I had read a book called “Incorporate Your Life.” I said I had not. The participant went on to say that it was a really interesting book on how you could turn personal expenses into tax-deductible expenses.
I tried explaining how non-business expenses can’t ever really be turned into tax-deductible expenses, but I’m not sure the message sank in.
After doing some research, I believe the participant was referring to a book called “Incorporate & Get Rich: How to Cut Taxes 70% & Protect Your Assets Forever!”.
I’ve never read the book so I won’t comment on the contents of the book. Though I think the over-the-top title speaks for itself….
But I will say this: simply having a business entity DOES NOT make everything in your life tax deductible.
Forming a corporation doesn’t magically make your mortgage deductible. Forming a corporation doesn’t make your grocery bill deductible. Forming a corporation doesn’t make the purchase of a big-screen TV for your living room tax deductible.
Legitimate business expenses are tax deductible.
Personal expenses are not tax deductible.
Should you take advantage of every deduction available? Of course! But don’t start a business just to get tax deductions … because that’s not how it works!
There are no magic bullets or tax fairies*.
(*-To give credit where credit is due, my tax blog-o-sphere buddy Joe Kristan is the one who coined the “tax fairy” phrase. I’m green with envy over the fact that I didn’t think of it first!)