I live next to farmers. Everything they do and own is a business expense. The business owns everything. Home, cars, utv, electric, propane, internet, new land, gas, desiel, and red desiel. They go on multiple caribbean vacations, rent out the banquet room and claim it as a business expense. Is this really what business are able to do?
In: Economics
If he’s claiming 100% of the house and the vacations then he’s absolutely committing tax fraud and better hope he doesn’t get audited.
Theres pretty clear rules about what and how much you can claim and for things that aren’t purely work related (i.e. housing costs) they can still be eligible but only at a proportional amount to the use for business, like if 50% of your kilometers in a year are farm use and the other 50% is personal, you can only claim 50% of your vehicles expenses on taxes, and you need documentation to support that 50% rate.
But the thing about taxes is it only matters if you get audited. You can claim whatever the heck you want in the meantime but if you’re less than honest that can come with some steep fines and I would assume jail time in extreme cases, should you get audited in the next 4(?) years.
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