Issue link: https://www.massageandbodyworkdigital.com/i/77400
BUSINESS SIDE knocking at your door unless the IRS thinks you're running a cartel and laundering money. Schnepper says that every year the IRS mails out more than 1 million letters to taxpayers who fail to sign their tax returns. In reality, small businesses are much more likely to be audited than big companies, and that applies to service businesses in particular. The assumption is that small service businesses are much more likely to receive cash payments that may go unreported. You can avoid being audited by making your home energy efficient, and earned income credits. If you're unsure of all the deductions you're entitled to, this is not the time to be stubborn; pay a tax professional to figure your taxes. I'd be afraid not to. In spite of the fact that I do my own daily bookkeeping for my business and my husband's business, I feel more secure in turning my taxes over to a knowledgeable professional who is going to be sure I get to keep as much of my money as possible. The deductions and credits she finds for me are worth much more than I pay her to do my tax forms. SURVIVING AN AUDIT Few words strike as much fear into a human being as, "You've been chosen for an audit." Don't be scared; by definition, an audit is simply an examination of your tax return. According to Jeff Schnepper, a popular columnist on the Microsoft Money Network, the biggest reason people receive a letter from the IRS is because of human error. Most audits are conducted through the mail; it's highly unlikely the taxman will come checking your numbers and being sure your tax return is free from mistakes (another reason to hire a professional). Don't ever brag about cheating the IRS—they'll give whistle- blowers as much as 30 percent of the tax they collect from the deliberately dishonest. Also, make sure your tax return matches your supporting documentation and remember that most audits take place within 18 months of filing. Generally, there is a three- year statute of limitations for the IRS auditing a tax return (so you need to keep your records for at least that long) and a 10-year statute of limitations for the IRS collecting tax. The bottom line, if you are audited, be cooperative. Remember, the steps to stressing less about taxes and keeping more of your money are simple: get organized, be prepared, and seek the proper help. Simple Guide to Therapeutic Massage and Bodywork Examinations (Lippincott Williams & Wilkins, 2009), One Year to a Successful Massage Therapy Practice (Lippincott Williams & Wilkins, 2008), and A Massage Therapist's Guide to Business (Lippincott Williams & Wilkins, 2011). Allen is the owner of THERA-SSAGE, a continuing education facility and alternative wellness clinic of more than a dozen practitioners of different disciplines in Rutherfordton, North Carolina. Visit her website at www.thera-ssage.com. Laura Allen is the author of Plain & Deductions to Consider Here's a list of what the self-employed may be able to deduct. Remember, independent contractors are considered self-employed individuals for tax purposes. • Advertising and promotional expenses • Books, trade magazines and other publications, videos, and any massage or business-related media • Charitable contributions • Cleaning costs for your office • Continuing education expenses • Dues and fees, such as professional association memberships, state and local licenses, and the cost of maintaining certifications • Internet access, if you're using it for work purposes such as emailing clients and maintaining a website • Health insurance (partial deduction) • Interest on loans, if you have borrowed money to finance your business • Laundry service • Meals and entertainment (50 percent are deductible), as long as it's business-related • Office and massage-related equipment • Postage • Printing and reproduction of business cards/brochures/office forms • Professional services, such as lawyers and accountants • Rent • Repairs and maintenance on business premises and equipment • Telephone • Travel, as long as it's business-related • Uniforms • Utilities earn CE hours at your convenience: abmp's online education center, www.abmp.com 25