Thread by @roncaruthers

1. Will you get audited if you employ tax savings strategies, like @WCarlRussell is concerned about.

It's a pretty rational concern.

In fact, the IRS COUNTS on enough people having this fear so that they do NOT try anything.

However, how real is it?

2. First off, your odds of getting audited statistically DO climb if you add self employment income OR losses.

But, they climb from a .8% chance each year to a 1.2-1.4% chance each year.

In other words, about 8 people out of 1,000 get audited, vs 12-14 that own businesses.

3. So, the odds are WAY in your favor that nothing ever happens.

And there are things you can do like filing at the last minute that seem to improve those odds in your favor.

However, the SECOND point is even more important than the first:

4. As LONG as you dot your 'i's and cross your 't's there is nothing to fear.

For instance, if you employ the August Rule and rent out your house for 14 days or less, you're allowed to not report the income.

5. If your corporation rents it from you for 14 days as a 'retreat',

as long as the rent is reasonable (like what someone else would rent it for),

then your deduction will stand even if they DO audit you.

6. Some people go WAAAYY aggressive with this knowledge and abuse it, but if you play within the rules, and document what you're doing, you have nothing to fear.

And it helps to keep in mind WHY the IRS allows these deductions:

7. Every big business started as a small one.

So, if your business blows up and becomes a nationwide franchise one day, or the next APPLE or TESLA, they're going to be collecting PLENTY of taxes from you and your employees,

8. So it makes sense for them to allow you these deductions to encourage you to start something.

Hope this encourages all of you (and especially you, Carl) to not just read my threads, but to act on them.

/end