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If You Operate A Home Business Online or Offline Don’t Even Think About Hiding From The IRS

Before I get into the meat of this article I want you to know that I am not an accountant or a CPA. All statements below are based on my many years of running my businesses from home.

When the subject comes up I always make this fervent wish: "May you pay $1,000,000 in income taxes!"

Think about it. That would be a fantastic blessing, would it not?

Even though I look for ways to boost my business earnings, I would never consider cheating the IRS. It’s wrong and it's not worth the stress ulcers. Besides, it’s such an unnecessary risk. When you go down that road, you’ll always be looking over your

shoulder, wondering when you’ll hear the knock at the door. Keep your peace of mind. This will help you be very successful in your business.

By paying our self employment taxes you are also building up your social security retirement income. Talk to your accountant to learn more about that.

First and foremost, the IRS gives you enough room to roam as far as your write-offs. Why take a chance and make your life miserable when you get a call from the IRS? My experience in life tells me that the IRS gets more angry if you understate your income than overstate your expenses. I'm not by any means suggesting that you fib at all with your expenses. Just put the maximum into the form that you honestly believe are allowed. Usually that will keep you out of trouble.

But if the IRS gets wind that you intentionally understated your income, then you better be worried.

The idea of “innocent until proven guilty” doesn’t work with the IRS (as it really does not work in the court system, but that's another story). If you make any regular online sales, you might have to persuade the tax man that you don’t have an online business. And it will definitely be up to you to do the persuading. I wouldn't worry much if I sold a couple of items after cleaning out the basement. In fact I don't know the IRS rule on that. But if you sell stuff regularly then be sure to claim the income from those sales.

The IRS is finding new ways to hunt down online payments, even though it’s not very easy. There are dedicated teams currently probing the internet (and Ebay) searching for clandestine online businesses. Beware: if you have any online money deposited into your bank account, the IRS can trace it. So, even if you’re feeling lucky, don’t try to pull it off. And don’t try the “ignorance of the law” routine. It’s never worked yet, and it won’t work in the future.

Be good. Make a ton of money. Pay your fair share. Enjoy the fruits of your labor.