Handling Effectively Cash Transactions
Posted by admin on Feb 17, 2007
Many businesses operate with cash transactions. The government is very specific about these types of transactions and they can be, unfortunately, costly to anyone not reporting correctly.
The underground economy in general is a target for the IRS and the government itself. For this reason, specific laws exist for cash transactions. Any business transaction done in cash over $10,000 must be reported to the IRS on Form 1300, Report of Cash Payments Over $10,000 Received in a Trade or Business. This form is readily available.
Some of these forms are called Currency Transaction Reports.
It is extremely important that these are filed correctly because those that do not file the correct forms and the IRS finds out, you be audited, fined, and even charged with criminal activity. This is perhaps one of the most important aspects of business tax reporting.
What The IRS Wants To Know
Posted by admin on Feb 10, 2007
As a small business owner, it is your responsibility to report any and all business income to the government accurately. They want full information. In most cases, accurately reporting your income and tax situation will provide you with an “in the clear” type of situation. Yet, you may want to know what they are specifically looking for.
If the IRS does investigate you, they will want answers to some specific questions.
Did you report all of your business receipts and income?
Did you report all cash transactions that have taken place, especially large ones?
Does the lifestyle that you lead fall into line with the income that you bring in?
Are your deductions for business only or do some fall under personal expenses?
Are you classifying your workers as employees and contractors correctly?
What vehicle, travel and entertainment expenses have you claimed that are not business related?
Do you have the correct payroll tax deposits made?
Consider where your business falls into line here.