QUESTION:
Dear Taxman – This summer I started a lawn mowing business and made about $3,000 mowing grass. However, my expenses were more than my income. Do I need to report it on my tax return?
ANSWER:
Dear Reader: The IRS requires all business income to be reported when you file your tax return. You won’t owe any income tax if you have receipts to prove your expenses. Any loss you report can be used to offset other income you and your spouse may have, and actually get you a higher refund!
Most important is to keep your receipt in case the IRS wants to see them, especially any mileage records if you are deducting vehicle usage. Good documentation is key!
“Ask The Taxman” originally appeared as a column in The Brunswick Citizen. All responses are written by Jim George, CPA. If you have a question for a CPA, contact us!