Business owners often think that if they pay money for anything that is business related it’s a business expense; while this is often true, sometimes it’s not. If the expenditure falls under a different IRS definition it could cause different deductability rules and limits to be applicable. Therefore, putting the business owner at risk of an audit do to over stating business expenses. This may result in unnecessary penalties and interest along with an increase in tax liability for the year in question.
Prevent that from happening to your business by understanding the difference of these expenditures. Continue reading “Business Expenses vs. Assets | Is there a difference according to the IRS? and Tax Reform changes.”