Lynn Karam

Every contractor knows the goal of business ownership is to be profitable. Yet every year contractors face unexpected financial challenges can end up severely affecting their businesses’ bottom line. One thing that contractors can do to mitigate their risks is to seek tools that help shift financial and tax hazards to external parties or institutions. For this reason, tax planning is important for contractors at every stage of the business process.

IRS audits are on the rise among trade business owners, and as someone who provides tax services to contractors, I know how important it is for them to understand the audit process. Even though being invited to participate in an audit can sometimes strike fear in a business owner, remember that an audit is just one of the methods the IRS uses to verify the information taxpayers represent on their tax returns.

One of the most common questions I am asked by clients, and especially contractors, is “How do you take advantage of the opportunities that exist in the tax code to pay as little tax as possible?” Taxes are an ongoing obligation that must be addressed by every business, and contractors are no exception. As revenue increases the tax exposure to contractors can increase at a rate that greatly affects their cash flow.