As you run your own corporation you may sometimes feel like you are running it for the federal government as well.
You must overcome this nagging feeling by knowing that: Your business IS being run for the benefit of the federal government. Of course, you are running it for your benefit, and if done right you will benefit handsomely. But, like it or not, the government is a beneficiary of your business success. And not only that, if you don’t pay what the IRS super computer determines is fair, you are going to be checked on for the accuracy of Uncle Sam’s cut.
That’s just the way it is.
As a business, especially an enterprise involving self-employment, the IRS audit rate is four times greater than that of wage earners. Face it, with the withholding of personal income taxes and limited write offs, there isn’t that much for the IRS to get from a wage earner that they haven’t already attached. A business, however, with its deductions and ability to control the receipt of income and payment of salaries is fertile ground for the IRS. (But again, please don’t let any of this deter you from owning and operating a business. You can get through it.)