CEOs – Take caution when writing off business expenses

Watch this short video by Mauro Colabianchi here.

Expenses against stated income are some of the things that can flag your return for an audit. The IRS and other regulatory bodies will cross reference your declarations, say the mortgage interest in your schedule A, with your Zip code to see what other taxpayers are claiming. They do a lot of those statistical analyses to flag a return, see if it might be a good candidate for an audit.

If you feel your expenses are valid, keep good records, so you can lay it out for the IRS. The bottom line is that business owners need to pay themselves a reasonable salary based on what kind of services they’re providing for the business.

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