Busted! Don’t Believe These Accounting Myths!
Not many words have the ability to make stress levels of some individuals and small business owners skyrocket like the word – taxes. However, with the right attitude and knowledge, you could get through tax season without a hitch.
Often, misconceptions affect your ability to make informed decisions that could keep you off the IRS’ radar and in the good books of tax officers. To help you avoid these pitfalls caused by misinformation, here are a couple of debunked myths from the world of taxation.
Myth 1: Changing tax preparer will cause a tax review.
This could not be further than the truth; what can cause a review is a dramatic change in your return. For example: One year a client of mine claimed over $10,000.00 in medical expenses. For the previous few years, there were no medical expenses claimed. Sure enough two weeks after filing, my client received a notice stating that his medical claim was being reviewed.
Should something unusual occur in your tax situation, just make sure you retain the related original documents supporting all tax claims. Also by using the services of a tax preparer, you can be assured that he will maintain proper documentation supporting all claims filed.
Myth 2: You can claim a flat rate amount for business mileage on your tax return.
Contrary to belief, this myth is actually true. If you are going to deduct or claim allowable motor vehicle expenses, you must maintain an accurate logbook of business travel over the entire year. This includes documenting for every business trip, the destination, the reason for the trip and the distance traveled. When a vehicle is used partially for business, and partially for personal purposes, the expenses related to business travel or commercial activities must be apportioned.
Knowing the reality concerning these two myths, could help you end up saving money. If you’re looking for quality professional accounting and tax services in London, Ontario, contact J.M.J. Accounting & Tax Services Inc. We have a lifetime of experience serving the accounting and tax needs for small and medium-sized business across southwestern Ontario.