The IRS is cracking down on Sole Proprietors, such as The Easter Bunny, The Tooth Fairy, and Possibly even Santa Claus regarding excessive tax write offs, especially in the mileage claimed for business use.
These characters apparently never set up the right corporate structures to protect themselves and decided to operate as the most simple business form, the sole proprietorship.
Unfortunately, the sole proprietorship has the most liability, least tax benefits and the most possibility of negatively affecting ones revolving debt and future ability to develop business lines of credit.
Even the Easter Bunny can not afford to ruin his personal credit by using personal credit cards to finance his Easter Egg Business!
Why is a sole proprietor most likely to be audited?
The IRS believes there is a $300 BILLION tax gap --- $300 BILLION in uncollected taxes --- each year! The biggest culprit? Not large corporations, but small business owners.
In fact, sole proprietorships are 300% more likely to get audited than someone who does not file a schedule C!
It is important that any business owner also document their records properly. In fact, the Easter Bunny may have excessive claims of business mileage especially since he has never owned a car.
One more major problem! Anytime you operate a business as a sole proprietorship and you use your personal credit cards to finance your business, which is very common, you jeopardize your ability to obtain more business credit in the future when you incorporate.
Why? When you incorporate your business and apply for a business credit card, a smart thing to do, you will stop using your personal credit cards. The key is to protect your personal revolving debt ratio. It should at least be a 50% ratio between your credit limits and your current balances. Less is better.
Keep in mind if you have a home equity line of credit (HELOC) that is viewed as the same as a big credit card by the credit agencies.
Solution: Run your business like a business. Document all your business expenses, use QuickBooks or some other accounting software to operate your business, and DON'T operate as a sole proprietorship! Incorporating is a much better approach.
Scott Letourneau of Nevada Corporate Planners has been called by the Famous 3 to see how they can correct their situation for the future. Mr.Letourneau says,The Easter Bunny has concerns also over protecting his Egg-sets (Assets) and his business that just can not be done in his current Sole Proprietor Status.
Update: A drunken Leprechaun faced an IRS audit this week for similar reasons and did not fair well after St Patrick's Day!
About The Easter Bunny
So your first child isn’t a baby anymore and you’re going to have to convince her that the Easter Bunny has hopped into your home, left a basketful of chocolate goodies and hidden a horde of dazzling colored Easter eggs around your house. As a new parent, how are you going to pull off this important holiday for your child? Here are a few hints for making sure your little one will believe in the magic of the Easter Bunny for years to come:
You don’t have to wear a bunny costume
The good news is that you don’t have to make a complete fool of yourself to create the illusion of the Easter bunny for your little prince or princess. You just have to have a little more energy than your child does for a couple of days while you prepare the following things:
•Colored eggs – no Easter is complete without them. The hard-boiled variety are not only fun to color, but are genuinely healthier than any chocolate treat you can muster up, so coloring your own batch is a great place to start. Boil the eggs on Thursday night and tuck them into the back of the refrigerator so they are ready to color on Friday; then they’ll be completely dry and ready to place into baskets on Saturday night.
•The basket – you can make your own, paint a basket you have around the house, or buy one. The best way to make your child believe in the bunny is to add a few home-made treats that only the bunny could have made. During the week before Easter, spend a night making some Chocolate Bunny Pops or easy Hollow Chocolate Eggs that you can add to your baby’s basket alongside a few little toys, and your toddler will be amazed.
•The hunt – so the last time you were involved in an egg hunt you were the one finding the eggs? As long as you remember the complete joy you felt when you discovered another of the Easter Bunny’s treats you’ll be alright. This is probably the most exciting part of playing the Easter bunny. If the climate in your area is particularly hot or humid, you may want to wake up early to hide the eggs instead of hiding them on Saturday night. If you are hiding eggs outside be sure to use tightly closing plastic eggs or well-wrapped treats.
Don’t be caught speechless
As small as they are, your kids will come up with some questions about the Easter Bunny that may stump you. Be prepared to defend the bunny as if your life depends on it! Some of the most common questions are:
•Why does the Easter Bunny lay eggs? Rabbits don’t lay eggs, and even if they did, the Easter Bunny is a boy. The real answer to the question is that the Easter Bunny (originally the hare) and the egg both symbolize fertility and renewal of life and are not co-dependent. But many people still think the Easter Bunny lays the brightly colored egg treats that kids find during the Easter hunt every year. Kids are not brainless though, and it’s pretty clear - even to a three year old - that the plastic eggs filled with store-bought candy are not actually expelled from the bunny’s body. So, you can completely deny that the bunny actually lays the eggs and tell your child that he buys them or makes them just like Santa buys or makes the toys that are delivered at Christmas time. Instead of a magical sack, the bunny has a magical basket. Or you can tell them it’s a complete mystery to you, too.
•What do Easter eggs have to do with the resurrection of Jesus? This is another good question that most kids ponder sometime during the Easter Sunday service, when they are supposed to be paying attention to the longest sermon of the year but can’t get their minds off the basketful of goodies they had to leave behind in order to get to church on time. Right after you reprimand him for letting his mind wander during the service, you could tell your curious church-goer that after the resurrection Mary Magdalene delivered a red egg to the Emperor of Rome proclaiming the rising of Christ. The red coloration represented the blood of Jesus, the egg shell His tomb, and the fertilized egg His renewed life.
•If the bunny leaves the eggs, why are we coloring our own? As kids grow up it is hard not to want to share the dyeing experience with them. But how do you explain that the Easter Bunny is no longer responsible for bringing the colored eggs with him? Well, it’s always nice to help out, and the Bunny does have a lot of work to do on the night before Easter. If we make our own there will be more eggs for him to share with the kids who don’t make their own.
No matter how many times you let the ball drop and think that you’ve given the kids reason to doubt your story, just remember that they want to believe in the Easter Bunny as much as you want them to believe it. The magic of it all is so alluring that you have lots of room for slip ups!
Both Scott Letourneau & Chloe Matthews are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Scott Letourneau has sinced written about articles on various topics from IRS Tax, Business Loans and Free Credit Report Score. Scott Letourneau is the CEO of NCP, Inc. and provides services for business owners including forming corporation or LLC, business credit, tax and bookkeeping support. Visit. Scott Letourneau's top article generates over 27100 views. to your Favourites.
Chloe Matthews has sinced written about articles on various topics from IRS Tax, Travel and Leisure and Culture. Chloe Matthews is a writer for the number one online Easter resource CelebratingEaster.com. Chloe’s expert knowledge on and. Chloe Matthews's top article generates over 1600 views. to your Favourites.
Breyers Ice Cream Company Klondike has many bars, cones, and sandwiches as well. Vanilla, Krunch, Chocolate, Whitehouse cherry, Dark Chocolate, Neapolitan, Caramel as well as the original Klondike are available