BUSINESS, TAXES, RED FLAGS

Tax season is here.
And some of you, business owners, worry about raising red flags with IRS.

What can increase your chances of getting audited?

Having business losses — for three straight years — can put you on IRS’ radar.
And you run the risk of having your business reclassified as a hobby.

IRS says “someone operates the business to make a profit.”
According to them businesses should be making profit three out of five years.
(Or two out of seven if your business is training, showing, breeding horses.)

When you keep having losses, it will attract IRS’ attention.
(Those red flags we mentioned earlier.)

Does this mean the IRS will automatically reclassify your business as a hobby?
NO

* Keep good records.

* Prove to the IRS that you run the operations in a business-like manner.

* Have a business plan — showing you fully expect to make a profit (soon).

Wishing you success in all you do.

Mariana Fieraru

Mariana Fieraru, an Eastern European transplant, fell in love with her new home shortly after landing in New York. She "discovered" pizza! Years later she still loves pizza. And so do her two feathered-kids, Sunny and Flipper

Mariana worked on both, the east and the west coast.
Big or small, each project she worked on helped define the importance of gaining and sustaining a competitive edge in an increasingly complex business environment.

Business know-how, love of teaching and writing – all combined in 2006 to form OBI.
Its mission: to make learning fun! And easy.

Through its training, consulting, and publications OBI builds bridges of knowledge to take you from where you are to
where you want to go. Using a mix of serious, informal, analytical, and optimistic approach, OBI truly makes learning fun.

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