Intermingling personal and business finances may lead to disallowed deductions

A couple of years ago in TTW #109 we introduced ROBS as a strategy to fund a new business. The following is a recent article in Businessweek about this risky strategy.

Taxes may be one of a business owner's largest expenditures. Therefore, they deserve the planning and monitoring that accompanies any other major expense. A year end meeting with your accountant should always include an estimation of your taxes. The discussion should include the projected tax amount, along with the various methods and opportunities to negate or reduce the taxes at both your company and personal levels. However, sometimes paying the tax is cheaper than incurring the costs of reducing them. No one wants to spend $10 on something of little or no value to save $2. With the exception of a retirement plan contribution, tax planning must be complete by New Year's Eve. Trying to do tax planning for the prior year while sitting with your accountant in early April for your tax return preparation is simply a day late, a dollar short.