Comment on Why do big corporations get to claim losses, but small businesses can't?

IrateAnteater@sh.itjust.works ⁨2⁩ ⁨weeks⁩ ago

• dhork@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

  Think of someone who makes small crafts and sells them on some online platform. Someone who does this as a business will keep track of their materials costs, and subtract them from their sales cost, only paying taxes on their actual profit.

  But the IRS will only let you do this if they determine your intent is to make a profit. If they think you are purposely just selling enough to cover your materials, but using most of the materials for yourself, they can tell you that you never had an actual business in the first place, and that all that deducting of expenses never should have happened.

  source

  • Buttflapper@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

    Seems like it’s completely subjective, too. I’ve seen many posts on reddit about people being shafted by the IRS and forced to pay back a ton in taxes even though it was a legit effort to run an actual business, simply because they don’t “think” it’s a business

    source

    • ForgotAboutDre@lemmy.world ⁨2⁩ ⁨weeks⁩ ago

      It’s hard to get a good read on these things. You’ll only see the perspective of the person that thinks they were cheated by the IRS. The IRS won’t make Reddit posts about people carrying out tax evasion.

      Likewise you say the IRS dont think it’s a business. They probably carry out much stricter measures than that. Probably much stricter than the people complaining on Reddit. The people complaining also only “think” it’s a business.

      source