Yes, I hate to remind everyone that a week from tomorrow our taxes are due–the IRS is patiently waiting for our money! It seems that the beautiful spring weather of April is always shadowed by the call of the Federal Government for our hard-earned money. A truly depressing way to kick-off the season of flowers blooming, trees sprouting their leaves, and cool breezes. While I’ve always been the eternal optimist, trying so often to look at the bright side of things; I can’t come up with the bright side of writing a check to the “Internal Revenue Service.”
I recently spoke with a very good friend of mine who like myself is self-employed. Our discussion was about how many months of each year we work to pay the IRS. It was a rather disturbing conversation, since we know that the more money we make the more money we pay the IRS. In many ways it seems that the Federal Government doesn’t give anyone the incentive to work for themselves and strive to be successful. If you think about it, why in the world would you want to increase your income if it just means that you will have to write a much larger check to the IRS?
Don’t get me wrong, anyone who works for themselves will give you a list of the advantages of doing so. You’ll hear the standard replies like, “I like being my own boss”, “I like being able to set my own hours”, and “I like controlling my own destiny”. What we rarely hear are the many down-sides to owning your own business. However, during the month of April you will hear the cries of many self-employed as they mail those tax returns!
While the anxiety levels of the self-employed tend to rise this month, there are many resources to assist those looking for answers. One of the questions I often get from my clients is, “what do I do if I get audited?” My first answer is “always cooperate with the IRS”, and my second answer is “always cooperate with the IRS.” The worst thing you can do is appear evasive when confronted by an IRS Agent. Hopefully, small-business owners have a good CPA and a knowledgeable Attorney to assist them through the process should it arise.
Recently, I read a great article written by Karen Klein of Bloomberg Businessweek entitled “How to Handle a Tax Audit.” This article contained some extremely valuable information on how to deal with the IRS if you’re being audited. I would encourage you to read this–not only does it offer great advise on how to handle an audit, but there are some great tips for business owners.
Let me be clear when I say that American’s do need to pay their fair share to keep the country running. We all know that our Troops need to be paid, our mail needs to keep coming, and Congress must function. What I do not believe is that our government is running as efficiently as it could, and much of our tax dollars continue to be spent on waste, fraud, and abuse. I would imagine that many of us would feel better about writing the check to the IRS if we knew our money was being spent wisely, and that we had real budget hawks looking out for our best interests. Today, this isn’t the case and on April 18th, Uncle Sam will have his hand extended; show me the money!