October 30, 2008
Limited Liability Corporation Can Reduce Tax Audit Risks
Did you know that sole proprietor businesses are one of most risk structures you can use today? You place everything you personally own including your home at risk when you use one. But, it gets even worse because sole proprietor businesses can also subject you to a higher chance that the IRS or a state taxing authority will audit your business. This is because so many people purport to have a real business when in fact they are just trying to get business deductions. The better practice is to start a limited liability corporation as your business vehicle and run it through this entity. You get liability protection and a reduced chance of audit because if you have an LLC it is more likely you have a real business and are not trying to take advantage of the taxing system.