|
Dear Phyllis:
I daresay you need to consult an income tax professional or accountant for
answers to your questions, as I am only a sole proprietor such as yourself.
My understanding is that if you show a loss for three straight years, your
records will be more closely scrutinized by the IRS. Whether that means an
audit, I cannot say for sure.
I am going to assume the reason you are losing money is because you have
expenses that exceed your income....such as supplies, mileage, a home office,
etc. As this is probably the case, what is the use of working if you are
paying out more than you are making?
I believe you need to take a very close look at your 'bottom line' to be
sure that working is financially beneficial to you. There are instances where
you have to lose money (or you show a loss) to make money, but that usually
comes into play as your business grows. If your business is not growing, you
are just spinning your wheels and should probably find something else to do.
About the PowerHomeBiz.com Guide:
Tammy Harrison is a successful
home-based working mom for over five years. She holds a degree from Mizzou in
Consumer Economics. Her business focuses on Marketing and Creativity for
Small Businesses as well as numerous other small
businesses. For more information, you may contact her at http://www.jdharrison.com
The opinions expressed in this
column are those of the author, not of PowerHomeBiz.com. Users should not
treat the Guide's response as legal, accounting, or professional advice as all
answers are intended to be general in nature. Such advice can only be properly
given by qualified professionals who are fully aware of a user's specific
geographical areas or circumstances, such as an attorney or accountant.
| 
