The decision to let go of your business bookkeeping is not one that people take lightly, after all, you are letting a stranger into the inner sanctum of your business and private life, and your finances. So how do you know that they are trustworthy, responsible, discrete, accurate, professional and competent? Most employees or subcontract service providers you take on are there to provide a relevant service for your business and it is quickly apparent when they cannot perform. For instance, a salesman who upsets all your customers, a secretary who can't keep a polite tongue in their head under pressure, a worker who cannot get to grips with a process.
Incorporation is a big step toward success for you and your business. Chances are you've considered the key benefits of incorporation: Secure personal assets through liability protection Save money on taxes Establish credibility with customers There are many people who consider S-Corporation election when forming their new corporation. An S-Corporation offers both advantages and disadvantages that regular C-Corporations do not, and may be beneficial depending on what type of business you run and how you would like to run that business. S-Corporations operate similarly to regular corporations, but are taxed in a manner that is similar to a Limited Liability Company.
One thing you can always count on during an audit is a request for documentation supporting meals and entertainment expenses. The IRS has found that these expenses are heavily abused and are an easy way to generate additional tax revenue, not to mention additional revenue from penalties and interest. You don't have to spend a lot of time reading tax cases to find one where meals and entertainment expenses were disallowed specifically because of improper documentation. *Here are a few examples from recent cases: The taxpayer's business meal expenses did not satisfy the substantiation requirements because they did not include the taxpayer's relationship to the parties involved or specify the business purposes of the meals.