Should You Run Personal Expenses Through Your Business?
By Gene Marks and Ben Gran
Published August 8, 2014 | The Hartford, Small Biz Ahead Newsletter
The truth is, many small business owners have, at one time or another, blurred the lines between “business” and “personal” expenses to try to save money on taxes. No one’s perfect. No one talks about it, or likes to admit it.
But it’s too tempting.
Charging a personal expense through the business means taking a deduction for it against income. And if our state and federal tax rates are somewhere between 20-30% combined, then effectively that could be like getting a 20-30% discount on those things purchased. It’s a perk of being a business owner, right?
What harm is there?
And really, who’s going to know? Chances are someone probably won’t even get audited. And besides, even if a small business owner fudges the numbers a bit on their tax deductions, it’s such a small amount, relatively — the IRS has much bigger fish to fry, right?
Is charging personal expenses through the business legal? Of course not. It is fraudulent. But the legality is not the issue. There’s another bigger issue at stake here…[More]
To read the full article by Gene Marks and Ben Gran, visit: Should You Run Personal Expenses Through Your Business?