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Top 10 Tax Myths Busted

For the last 10 weeks, we’ve been busting tax myths left and right on our Financial Gravity blog. Below is a summary of all the myths we’ve busted in that time.

1. Having an accountant is the same thing as having a tax planner. MYTH

Everyone knows that if you are an entrepreneur or small business owner, having a good Accountant is essential to the function and success of your business, but it’s not everything. If you want to lower your personal taxes, increase your profits, and attain greater wealth, you’ll need the help of a Tax Planner. Read more here. 

2. Taking a proactive approach to tax planning will put your business at risk for an audit. MYTH

Implementing strategies that help you reduce your taxes will not raise your risk of audit. In fact, it’s why the Internal Revenue Code exists (all 70,000+ pages of it). Inside the IRC, there are plenty of legal ways that Small Business Owners like you, can learn to lower their tax liability and keep capital in your business. Read more here. 

3. Becoming an LLC prevents me from having to pay Self-Employment taxes. MYTH

Becoming an LLC will not magically prevent you from paying Self-Employment taxes. Why? Because an LLC is not a tax filing status. To determine which tax filing status is right for your business, get in touch with a Tax Professional. Read more here.

4. Having an IRA or 401k is a Sufficient Retirement Plan. MYTH

If you are a small business owner, and you have an IRA (Individual Retirement Account) or a 401k, you don’t actually have a sufficient retirement plan. Not only do conventional retirement accounts (401k, 403b, 457, SEP, SIMPLE, IRA) contain massive hidden fees but they only work if Taxes don’t go up and Your income decreases upon retirement. Read more here. 

5. Kids are an expense. Case Closed. MYTH

As long as you have a written contract, you are paying your “employee” through the payroll (so the IRS gets their fair share), and the money is being deposited into your “employee’s” account, it’s totally legal, moral, and ethical. Read more here. 

6.  The Affordable Care Act took away my ability to write off medical expenses. MYTH

There are still PLENTY of ways for you to write off glasses, braces, massages, acupuncture, and other medical related expenses. Here are just a few; Flex Plans, Health Savings Accounts (HSAs, or a Medical Expense Reimbursement Plan (MERP). Read more here.

7. A home office deduction will put me at an immediate risk for an audit. MYTH

Not only is a home office deduction LEGAL, MORAL, and ETHICAL, but there are four different ways (YES, FOUR!) to do it. If writing off your home office was risky, why on earth would the IRS give you four ways to do it? Read more here. 

8. If there is food involved, then it’s a meals and entertainment expense. MYTH

If the food is part of a marketing expense, bought while traveling for work, or purchased for staff as a “working lunch”, you may be able to deduct 100% of the cost. Read more here.

9. Mileage is the only tax write-off I can use for my car. MYTH

In addition to writing off your mileage, the Internal Revenue Code allows you to write off your leased car (but not a loan.) Read more here. 

10. If lowering my tax liability was that easy, I would already know about it. MYTH

Most accountants, attorneys, or business consultants aren’t taught to master the myths standing between you and your money. In fact, the financial industry benefits from small business owners not understanding tax myths. At Financial Gravity, however, we have expert tax planners and tax specialists who not only understand the tax code and the available “green lights” you can use to reduce your taxes but who will help you engage in proactive tax savings and tax planning. Read more here. 


If you’d like to read about the myths in further detail, you can download your own copy of the Tax Myth eBook here. After reading the eBook, you’ll have a better understanding of what you need to do to lower your tax liability, increase your profit, and enhance your quality of life.

*image by Edu Lauton

Tax Savings

As a small business owner, finding legal and ethical ways to increase your tax savings shouldn’t be a full-time job in itself. Unfortunately, most accountants, attorneys, or business consultants aren’t taught to master the myths standing between you and your money. In fact, the financial industry benefits from small business owners not understanding tax myths.

Wait, my accountant can’t help me with tax planning and tax savings?

The CPA exam is focused on General Accepted Accounting Principles and has nothing (absolutely NOTHING) to do with taxes. Your accountant may be a lovely human being, but they aren’t the ones you should be consulting about tax savings.

So if I can’t turn to my CPA to help me find ways to pay less tax, who can I turn to?

Well, you have a couple of options. You could read all 70,000+ pages of the Tax Code. (Though this option will likely be zero fun for 99% of the people on the planet.)

Who is this option for?

People who have too much time on their hands and a passion for onerous, complicated, and bloated text.

No, thanks. I’ll pass. Any other options?

You could download the Tax Myth eBook, a book that our CEO, John Pollock, put together outlining 10 of the most damaging misconceptions about taxes — and then read it. This free eBook will help you prevent further loss (in taxes) or prevent you from losing money in the first place.

Who is this option for?

Do-It-Yourself-ers who want to lower their tax liability…quickly, legally and ethically, and who make under $100,000 gross income. 

What if I make more than that, what should I do?

Get in touch with us. At Financial Gravity, we have expert tax planners and tax specialists who not only understand the tax code and the available “green lights” you can use to reduce your taxes but who will help you engage in proactive tax savings and tax planning.

Who is this option for?

Business owners who have a shortage of time, zero desire to learn about the Tax Code and either pay $20,000+ in personal income taxes or make $100,000+ gross income.


If you’re a small business owner, taxes are your single biggest expense and they will get bigger if you don’t have a sound strategy in place to mitigate them. 

*Photo by Ante Samarzija on Unsplash

Taking a proactive approach to tax planning will not put your business at risk for an audit. I repeat, taking a proactive approach to tax planning will NOT put your business at risk for an audit. If your Tax Preparer or Accountant tells you that a tax-reducing strategy will create a red flag with the IRS, it might be time to get a new Accountant. In fact, if you pay more than $20,000 in personal income taxes (or make $100,000 or more gross income), it might be time to hire yourself a professional Tax Planner.

If your Tax Preparer or Accountant tells you that a tax-reducing strategy will create a red flag with the IRS, it might be time to get a new Accountant.

Implementing strategies that help you reduce your taxes will not raise your risk of audit. In fact, it’s why the Internal Revenue Code exists (all 70,000+ pages of it). Inside the IRC, there are plenty of legal ways that Small Business Owners like you, can learn to lower their tax liability and keep capital in your business. There are rules tied to their use, and most of the rules are surprisingly simple.

Common “Green Flag” Strategies (You’re Probably Already Using)

Standard Deduction

Mortgage Interest

Charitable Deduction

Less Common “Green Flag” Strategies (You’ve Probably Never Heard Of)

Use Your Swimming Pool As An On-Premises Employer Athletic Facility 

14 Day Augusta Rule – Rent your house and earn tax free income

Implement an Enterprise Risk Management Plan

Though you’ve probably never heard of the less common strategies, they are legal to use and will, in no way, increase your chances of being audited (as long as you follow the rules tied to their use.) If you’re happy “playing it safe,” because you’re afraid of the big, bad red flag,  then you must also be happy giving thousands of your hard earned dollars away. However, if you’d like to prevent further loss (or if you want to prevent losing money in the first place), this eBook is here to help. Inside, we’ve help to demystified the 70,000 pages of the IRC so you can start attaining greater wealth even faster.

Think of your accountant as a “food diary” app. It records what you eat and calculates the amount of calories, protein, fat, and carbohydrates you are consuming. But what good is it to have all this data, if it doesn’t help you lose weight or gain muscle mass? In addition to keeping a “food diary”, you’ll also need the help of a “nutritionist” to analyze the data and create a food and fitness plan that will help you attain your weight loss goals. Much like a nutritionist, Tax Planners provide a strategic plan to help you achieve your goals. Instead of obtaining muscle mass, however, your tax planner will help you achieve greater wealth. Sounds good, right?

Because the difference between an Accountant (CPA) and a Tax Planner may not be obvious, we’ve created this list below to help make it more clear:

Accountant  (Your “food diary”)

  1. 1. Passed a rigorous CPA exam that is entirely focused on General Accepted Accounting Principles (and has absolutely nothing to do with taxes.)
  2. 2. Records data and then transfers this data to a tax return (on your behalf.)
  3. 3. May offer “reactive” tax planning advice after filing your previous year’s taxes.

Tax Planner (Your “nutritionist”)

  1. 1. Uses principles found in the Internal Revenue Code (all 70,000 pages of it.)
  2. 2. Provides strategic tax planning services that help entrepreneurs and SMB owners increase their profit and attain greater wealth.
  3. 3. Offers you “proactive” tax planning advice that will help you pay the least amount of taxes allowed by law.

Everyone knows that if you are an entrepreneur or small business owner, having a good Accountant is essential to the function and success of your business, but it’s not everything. If you want to lower your personal taxes, increase your profits, and attain greater wealth, you’ll need the help of a Tax Planner. Unlike other tax-related services and solutions, at Financial Gravity we’re committed to working with you personally to proactively develop a plan to minimize your tax burden and maximize your success.

Download our free eBook “Bust the 10 Tax Myths Sabotaging Your Small Business Growth” today and learn how to reduce your tax burden.