3. Legal Fees for Illegal Activity
If you ever hired a legal defense lawyer for a criminal proceeding against yourself as a business person, the legal fees are tax deductible regardless of the lawsuit's outcome. It is important to note that the rules for personal lawsuits, such as divorce are different. However, if you embezzle money from your own business and need a lawyer to represent you, deduct away!
4. Donate inventory
Unsold or unused inventory is a cost to you. Instead of spending money on storing inventory or taking a complete loss, donate it and get a tax deduction. Keep in mind though, donations above $500 have more rigorous reporting rules.
5. Hire Your Kids and SpouseIf you pay a minor child up to approximately $6,000 annually from your profit for helping you with business-related tasks, that amount is not taxed at the same rate as income. Also, if you hire your spouse, then as an employer you can pay for the health care of your spouse's family, i.e., yours! Health care benefits expenses are also tax deductible. -- Written by Laurie Kulikowski in New York. Follow @LKulikowski To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com. >To submit a news tip, email: firstname.lastname@example.org.
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