UNDATED (AP) -- Americans are starting up small and home-based businesses by the millions, but many may be ill prepared when tax time rolls around.
Meisa (MEE'-sah) Bonelli, managing partner of Millennial Tax, a service for small and home-based businesses, says "the IRS is auditing them in the millions." She says many new entrepreneurs don't realize what they're getting into and fail to register their business properly.
Also, they get into tax trouble because they don't have the necessary documentation for business expenses. "Not only do you have to keep your bank receipts and your credit card statements," says Bonelli, "but you have to also keep the actual receipt of the charge."
Bonelli says that leads to problems with the IRS as well as missed opportunities for tax deductions or exemptions that could save them money.
She says small and home-based business owners need knowledge and advisory support that "cannot come from do-it-yourself software." Her advice is to use a specialist, because it could save a lot of money and avoid a lot of headaches. And the expense is tax deductible.
034-w-38-(David Melendy, AP correspondent, with Meisa Bonelli, managing partner, Millennial Tax service for small and home-based businesses)--Small and home-based businesses have special tax concerns. AP correspondent David Melendy reports. (19 Mar 2014)