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  • Diana Miret

Question # 4: Should I show a profit in the business?


You may assume that you "should" make a profit. But have you asked yourself why?


Let me be clear: YOU MUST MAKE A PROFIT


Because profit means stability. If your business consistently returns a profit, your business is stable. It can grow. It can hire people. It can pay the owner a salary. It can contribute to charities. It can serve the customer with consistency.


Accountants often encourage us to "spend" so you don't show a profit and have to pay tax on it.


I disagree. Show a profit, pay the tax and grow. You can invest the profit into the business. Or take the family to Hawaii. Up to you.


The IRS also has an opinion: if you don't show a profit, the you DON'T have a business, you have a HOBBY.


Diana



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