Top Ten Reasons You Shouldn't Follow Tax Advice You Receive at the Barber Shop

10. I know the barber's cousin Vinny has a sole proprietorship and has never paid a dime in taxes, but that doesn't mean you should follow Vinny's example and only report 1% of your income.

9. I know there are people who write off their dog food as a business expense. But Lassy's owner could defend the position that it was an ordinary and necessary business expense whereas you probably cannot.

8. I know your neighbor said that if you don't get a 1099 you are not expected to report it as income. But that is the same neighbor that said he never saw your new wrench and the wrench you saw in his garage with your initials etched in it was given to him by his great grandpa who has the same initials as you!

7. I also heard about the business owner who paid all of his employees as contract labor for 15 years and successfully avoided an enormous amount of payroll tax. But last year he spent about the same amount on attorney's fees just trying to stay out of federal prison after being audited by the IRS. And by the time you throw in all of the money he spent on over-the -counter anti-acids, he's actually in the hole now.

6. I am aware that your brother buys his girl friend a new SUV every year and writes off the full amount as business travel. But, can he spell "Civil Fraud Penalty!"

5. I am fully aware that you should be entitled to the home office deduction for 100% of your home. After all, you park the company car in your garage, you watch the company TV in your living room and you even read industry related magazines in the reading room. But are you aware that the exclusion of gain on sale of personal residence rules do not apply to the extent the residence was used for business.

4. Yes, I know the barber has never paid quarterly estimated tax payments and he has never paid a penalty (that he knows about). Ask him to check line 69 on last year's tax return. He probably paid this penalty without even realizing it.

3. I know leasing that new vehicle was a great deal for taxes (for the IRS). The salesman that sold it to you is laughing all the way to the bank with his huge commission check and the IRS is laughing because they get such a large percentage of his check.

2. I know your aunt really loved that simple DOS based checkbook software she used. But did she ever show the complete set of manual monthly books she also kept since she couldn't get the reports she wanted from the software.

1. Most advice is worth exactly what you paid for it. You aren't paying your barber for advice, are you?

Any resemblance to your barber, your barber's relatives, or your relatives is truly coincidental. So, do not be offended if any of these topics strike close to home. The bottom line is, we encourage you to take your responsibility seriously and educate yourself on the relevant aspects of legal business practices. This Kit can be an invaluable resource for achieving that goal.

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