Reporting Income for Tax Purposes

A very good rule of thumb to follow is to always, always report all of your income.  Not reporting income can be construed as fraud.  Fraud comes with big penalties and possible jail time.

There’s more leeway on how you report expenses.  In most cases, over-reporting expenses results in penalties and interest only.  It’s not considered fraud.

So, when in doubt if something is business income or not, report it as income.  Then, make sure you’ve taken all allowed expenses against that income.

This one simple tip can save you tremendous amounts of money and grief in the event of an audit.