Well, two problems there- not only did he not deduct these expenses, but he paid them in cash and had no receipts of the transactions he made to them. Remember all of the subcontractors he hired to do the work? Unfortunately, this was just the beginning of our problem. We’re sure you can imagine his face when we explained this to him. This means that he had deducted absolutely NOTHING on his tax returns.įor example, if his revenue was $1,000,000.00 and his net income was $500,000.00, he reported the whole $1,000,000.00 as his income for all prior years. There were so many things wrong.įor one, he reported his total revenue as his income on his tax return in prior years. He was leaving so much money on the table. It was our first time filing his taxes, so we asked to see his financial statements and tax returns from prior years.Īnd once we reviewed it, we were suddenly shocked. So eventually, tax time came and it was time to file his business taxes. And, he had contractors that he paid to fulfill the project work he was hired to do. He had a fairly successful business and is doing about 7-figures in revenue. Our client is a small business in the construction industry. We were motivated to create today’s post after speaking to one of our clients. If you want specific accounting advice, then please contact your attorney or CPA. So in this post, we’re going to give you the BIGGEST tax write-offs for small businesses.Īlso, a small disclaimer, the information we’re providing in this post is for informational purposes only and is not meant to take the place of legal and accounting advice. They are paying way too much in taxes and are missing some of the BIGGEST tax write-offs. Meanwhile, the top 1% are using the tax law to their advantage to minimize their tax liability, oftentimes leaving us clueless…Īs CPAs, we have recognized a common pattern amongst small businesses and self-employed individuals. This could be due to poor tax planning, or because they’re missing some of the biggest business tax write-offs. Taxpayers are overpaying by close to $1 BILLION dollars. Every year, more than 2 million taxpayers overpay their income taxes.Īnd this isn’t just pocket change.
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