I always get sideways looks from people when I say this: turning a profit is not a bad thing. Yes, you’ll have to pay tax on that profit, and that stinks. And yes, of course you should deduct everything you possibly can. But when you show losses in a business venture, that means you spent more money than you brought in.
Image courtesy of Pixabay.com This post from 2011 is quite popular. It's about a person in Minnesota who had a drag racing team which showed substantial losses each year. He took those losses as business deductions on his tax return, but the IRS and Tax Court said "no." The moral is: if you say [...]
What happens when a taxpayer files a tax return showing $0 of business income, offset by $58,000 of business expenses? They usually get audited. Especially when they have income from other sources of over $100,000. And if the taxpayer pursues the case to Tax Court, the Court usually sides with the IRS. Such was the case [...]