It’s Tax Time
Well, for some, it’ll be April 13th before you do your taxes. For me, we are almost done. At Charting Dreams, Jen is the creative one; me, I like accounting, numbers and the sort. Thank God for partners.
Filing and paying taxes are two of the most trying things we as small business owners have to do. As a small biz coach, I see that the role of “taxpayer” is perhaps the most stressful job our clients have. When I had my manufacturing company (29 employees), the shop ran from 4am to 11pm every day. Taxes were such a big part of my daily life. And the tax I feared the most was the 941 payment. If you do not have employees or if you have someone else take care of the employee payroll, then you are lucky — or really in trouble! (By the way, 941 is only for employee taxes, so if you do not have employees, then you do not need to worry about this tax).
But lets look at how we handle our taxes.* The key is to always play by the rules, never under report any income. This is my number one rule. I have never NOT reported all my income. And you mustn’t either. If you need convincing, this year the IRS is adding 800 agents and increasing its tax evasion/fraud detection budget by $462 million. Furthermore, I have personal knowledge that our money is actually being spent on this kind of thing. My neighbor is a gun-carrying IRS agent, and he specializes in tracking folks that hide money. With the backing of the mighty Internal Revenue Service, he has all the resources needed to hunt folks down.
I remember a news story about a person who under reported $1,000 in income, and this guy ended up going to jail. All for $1,000! I once knew a guy who did not even file his taxes for years. He came clean one year and it was so painful for him.
My advice: always report all of your income; never hide it. In today’s world the IRS has all of the time and money in the world to find you.
*Disclaimer: I should say up front, I went to school years ago and got an accounting degree, but I have never been an accountant, nor am I an attorney. Please, always get advice when it comes to these professional subjects.
Flickr photo, Tax Nerd (30/365), by alibubba
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