The Internal Revenue Service's practices sometimes confuse people to the point where they simply do not know how the IRS operates. Worse yet, they naively commit their small business to actions which may cause them to become audited by the IRS. Read on and answer a few questions about your small business and its relationship to the IRS so that you do not wind up having to cross their path in the future. If you find yourself being audited or otherwise legally hassled by the IRS, it is highly recommended that you hire the services of a certified tax attorney, such as those found at Dermot F Kennedy.
Should You Treat People As An Independent Contractor Or An Employee?
This really depends on the job for which you are hiring them. So long as you are giving people directions – even on a temporary basis – you should most likely hire them on as an employee. If the job for which you're hiring a person requires that you hire their service as a business – even if they are the only employee – then you should treat them as an independent contractor. Some examples of times when it is likely you will treat an individual as an independent contractor include hiring a freelance writer to pen a few articles for your journal or a group of individuals to paint a sign for your business.
What Constitutes A Business Expense?
Essentially, anything that can help your business flourish – so long as its use is delegated to the business – can constitute a business expense. Cash registers and computers are common examples of things that can often times be written off as a business expense. Even things like sound systems, which can help draw attention to your business, can constitute a business expense. There are certain items that can be difficult to determine, however. For example, your clothes do not constitute a business expense. However, if you require your employees to wear uniforms which you purchase, then these can constitute a business expense.
Should You Keep Your Own Books?
If you have successful experience keeping your own books in the past, then this should not constitute a problem. However, hiring the services of a seasoned accountant certainly wouldn't hurt your small business by any means. If your business is not doing well – or you are simply having trouble keeping track of your finances – then you should, without a doubt, hire someone to keep track of your books. It should also be noted that a tax pro or accountant's services can be written off as a tax deductible.