09 \\ IRS Hobby Loss Rules Explained: How LLC Owners Can Avoid Losing Deductions
- Author
- Tiffany Phillips - CPA, Small Business Money Mentor, Financial Expert
- Published
- Wed 09 Nov 2022
- Episode Link
- https://smallbusinessfinance.podbean.com/e/08-3-strategies-to-reduce-your-audit-risk-as-an-llc/
If your LLC or small business is showing losses, you need to know how to protect yourself from IRS scrutiny. In this episode, we break down the IRS hobby loss rules and explain what steps you must take to prove you are running a legitimate business. Learn about the safe harbor tests, the records you need to keep, and the red flags that trigger audits. Using real-world case studies, we show how business owners beat the IRS by documenting their operations, separating business accounts, hiring experts, and dedicating time to their business. If you’re in your first years of running a business and worried about an audit, this episode gives you clear cpa advice, tax strategies, and tax planning tips to keep your deductions safe and make sure your business is seen as for-profit, not a hobby.
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