Every year, small business owners try to get clever with deductions.
And every year, the IRS laughs. Then they send a letter. Or worse.
If you think you’re getting away with that “business lunch” that was just beers and wings with your buddy, think again. The IRS is hoping you make mistakes like that. Because when you do, they win. And you pay.
What Is a Tax Write-Off, Really?
A write-off isn’t a refund. It’s not a coupon. It doesn’t mean something is “free.”
It’s a business expense that reduces your taxable income. That’s it.
To count as a legit write-off, an expense has to be ordinary and necessary for your business. Not fun or personal. Not kind of, sort of related if you squint hard enough.
Write-Offs That Raise Eyebrows (and Audits)
You wouldn’t believe some of the stuff we see in the books:
- Fancy dinners for “client meetings” that never happened
- Vacations labeled as “research trips”
- New living room furniture marked as “office supplies”
- Online orders with no description, no receipt, and no clue what they were for
- A hot tub as a “stress management tool”
We’re not judging. But the IRS will.
The Real Cost of a Fake Write-Off
Get one wrong, and you’re not just losing that deduction.
You could end up owing back taxes you didn’t plan for. Add in late payment penalties, and now you’re paying extra for something that wasn’t even allowed in the first place.
Worse, it could get the IRS poking around where you don’t want them. And if you’re thinking about applying for financing or selling your business down the road, sketchy books can make you look careless or risky.
All that hassle for one shaky write-off? Not worth it.
No More Guessing. Do This Instead
Good write-offs are easy to defend. Bad ones are not.
If you want to stay out of trouble:
- Separate business and personal spending. No excuses.
- Document the purpose. Keep a clear trail of what the expense was for.
- Don’t assume. Just because your friend writes off their kayak doesn’t mean you should.
Bottom line? If you can’t explain the expense without sounding like you’re making it up, don’t write it off.
Want to Be Smarter Than the IRS Thinks You Are?
If you’ve got questions about your deductions, or if your bookkeeping looks like a mixed bag of guesses, we should talk. We’ll spot any risky write-offs and make sure your tax strategy doesn’t backfire later.
Hop on a call and let’s outsmart the IRS together.
