We all like to save money on our taxes. However, hiding personal expenses in your business tax return may do more harm than good. Most businesses are purchased as a multiple of cash flow (EBITDA). If buyers and lenders can’t find your personal expenses in the financials, they’ll be suspicious of our add-backs and will not ‘count’ towards your bottom line/value. It is in your best interest to drive cash to the bottom line in the last 2-3 years before a sale. Take a hit on your taxes and get a much larger return when you sell your business.
Drive Cash to Your Tax Return’s Bottom Line – Net Income
- by Kim Mehring