topic Not claiming some business expenses helps?? in Business & farm

Not claiming some business expenses helps??

sploosh — Tue, 04 Jun 2019 19:45:47 GMT

I discovered that by NOT deducting a few business expenses, I can increase my IRA deduction and also get a slightly higher refund. It sounds too good to be true! Is it? I know eventually I'll have to pay taxes on the IRA, but presumably by then its growth will more than offset that. It's not a lot of difference, but including the effect on my state taxes it seems worthwhile, especially if I can find the sweet spot.

The law requires taxpayers to accurately report all incom...

KittyM — Tue, 04 Jun 2019 19:45:48 GMT

The law requires taxpayers to accurately report all income and expenses on their returns.

However, if there are any expenses where you have taken an aggressive position or where you don't actually have the documentation to back them up, then you may wish to be more conservative in reporting your expenses. Otherwise, the risk in penalties and interest most likely outweighs your potential future gains.