02/12/2025
Have you ever been asked...
“Can I write this off as a business expense?”
“How can we legally lower our tax bill this year?”
When I get such questions from founders, I always go back to a framework I believe in:
1. Define the Business Purpose (The Intent)
2. Check the "Ordinary and Necessary" Test (The Standard)
3. Secure the Documentation (The Proof)
4. Assess the Compliance Risk (The Safety)
5. Calculate the Cash Savings (The Value)
For all the steps above, I also explain the why so that the business owner can connect the dots between spending cash and saving tax.
Just like an investor asks "Why is your burn rate high?", I’ve noticed that when I explain the reasoning behind a financial control or tax position, entrepreneurs are more likely to understand, maintain the right records, and make smarter decisions.
When people know the 'why'—the audit risk it avoids and the actual cash it preserves—they’re far more likely to support the process and keep their books clean.
- If you could clarify one gray area in your finances tomorrow, what would it be?
- What’s the most confusing tax question you’ve dealt with lately?-
- When asked “Can I expense this?” How do you approach it?
