As a CPA, I've run across some very creative tax rumors and crazy assumptions. Some favorites:
"If you create your New Jersey business and incorporate in Delaware or Nevada, you won't have to file or pay any state taxes."
Sorry! You do need to file tax returns in the state in which you operate, even if you incorporate in another state. Each state has different criteria for determining whether a business needs to file income tax returns. For example: Whether you maintain an office, location of operations, having employees in a state, physical presence and owning property.
"If you incorporate, you can write off everything!"
Wow - so not true! You can only claim deductions that are in accordance with the tax law, and being a company does not open the door to putting down just anything down as a tax expense.
And my all-time favorite question:
"Can I claim my pets as dependents?"
I wish! As the owner of two cats and a dog, I sympathize with the expense of feeding, medical costs, etc. However, the IRS doesn't recognize them as actual dependents.
Don't try this at home folks - we can help you weed through laws and requirements so you can comply with all regulations. We are here to provide you guidance, answer questions and dispel myths and misconceptions.