Business Endeavor Checklist

 

 

              The following is a useful checklist for any business endeavor. Follow this list carefully to

              avoid a hobby classification by the IRS.

 

                 1.Try to have a profit 3 out of 5 consecutive years (2 out of 7 for some activities).

                 2.Thoroughly investigate the profitability of your activity before entering into it.

                 3.Don't ever make a statement to the effect that you are "in this for the tax savings."

                 4.Keep accurate books and records.

                 5.Keep a separate bank account for your business.

                 6.Keep a good tax diary.

                 7.Develop a ten year business plan of expected income and expenses.

                 8.Treat your activity as a profitable business (advertise, get business cards and

                   stationery, get a business telephone listing, use promotional literature and consult

                   with experts).

                 9.Get as much training as possible.

                10.Document in your diary you spend at least one hour a day 4 or 5 days a week

                   working your business and meeting with prospects.

                11.Document any steps taken over the years to reduce business losses.

                12.Be especially careful if you participate in an "inherently suspicious activity."