The Tax Man Cometh!
It’s that time of year again, are you ready for all the changes in the tax laws concerning businesses like yours?
Yesterday I went to my CPA to have my taxes filed for the year. He informed me how the U.S. Government will be coming down harder on tax payers, small businesses and even the accountants themselves for any mistake (accidental or purposeful tax fraud) in their filed taxes.
The I.R.S. will be making a huge increase in the number of audits and really tightening the rules of what is and is not allowed.
This is just one of the reasons why I have always used a professional tax accountant to handle my paperwork and suggest to all of you to do the same. A tax professional will always be up to date with all the new, changes in and discontinued tax laws.
It seems that for the small business person they will be doing more audits and really tightening the deductions even tougher than before.
Some of their major concerns are the business expense right offs and the mileage right off.
If you are audited you will be required to show proof of any business expense you wish to claim to your accountant in order for them to write it on your tax forms be it equipment or office materials.
The biggest hit to DJs if audited that I can see is the expense of your music library. They want to see receipts for every single song you own be it bought at your favorite music store location or via the internet.
What this means for those without ethics who have been illegally downloading, sharing music files with friends or burning music for use at events, this could be a major legal battle for them. I see DJ web sites that claim to have 30,000 50,000 and even up to 100 thousand songs, well without a receipt for that music you won’t be in business very long. I would think that they then would also turn you over to ASCAP and the R.I.A.A. which is another whole bag of troubles.
The mileage write off is also at the top of their lists of “audit indicators.” You will need to prove to your accountant as well as the I.R.S. the mileage you claim for the business.
The I.R.S. is now holding the person or company who fills out and files the taxes accountable just as much as the person who taxes they are. Improperly filed tax papers, incorrect information or other mistakes can lead a fine that starts at $1000.00 for the tax preparer and goes up from there. If a CPA or other tax business is fined for a mistake, then that company will be audited and all of their client’s papers will be audited.
For those of you who work for a DJ company directly or through a broker type business, you need to make sure that they are registered with their Secretary of State where the home office is located as well as paying their state & federal employee taxes and if you are a “sub-contractor” of that business that they follow all the rules and regulations that are required by a business with “sub-contractors”
These laws are very tight and strict and the greater majority of the DJ services who claim to use “Sub-contractors” do not qualify for this listing with the government.
If you accept cash payments from clients or you are a business owner who accepts cash payments,, make sure that you claim that money on your tax forms. Somewhere down the line either the business will get audited or you will get audited. Either way both will get investigated by the I.R.S. or problems will emerge.
Jeff Richards: Party Time Productions