Taxes - Lower your stress level

This may seem like a no-brainer (it is) but I took the advice from a friend a couple years ago and get my taxes in as soon as possible that way you know where your at financially. While we have a few more things to submit, todays the January 8th and we have already submitted almost everything to the CPA. What a relief, now I can devote time to other more important things.

Don’t forget if your Incorporated, taxes are due March 15th!

Good Advice!

I have an accounting degree and I have been preparing taxes for individuals and businesses for years. I will try to answer any questions y’all post regarding the preparation of your 2010 individual or business tax returns.

Any good tax breaks? Have you come accross W-11 form? Maybe you can explain better than I did…

Hey bumblebee, what are the advantages of incorporating your business? What do you recommend for window cleaners? I hear good and bad things from both sides…

As a new business owner I am interested in knowing what can be written-off as a business expense. Aside from the obvious, what are you guys claiming on your taxes as write-offs?

Any paper supplies, pens, etc. Stamps, work clothing. If you keep track of mileage, ANY miles you drive when doing something business related such as making bank deposits, mailing a bill, picking up a check from Randy’s Sub Shop on the way to the movies, an appropriate percentage of your mortgage/rental costs for space devoted to running your business.
Not exhaustive by any means.

Thanks. I never thought of the mileage to the bank or mailing a bill. We need to start keeping track of that.
We will start a log of those miles.

the irs has a complete list of things you can deduct.
http://www.irs.gov/businesses/small/article/0,,id=109807,00.html
but what I can’t seem to find is how much you have to spend first before you can start deducting. isn’t it $5k?

Thanks guys! I wouldn’t have thought about part of my mortgage. This is really helpful.

I’ve read that this practice can also be a red flag.

Be very, very careful trying to deduct a home office. It draws a red flag that could get you a letter from the IRS. Here is why, the portion of your house you are trying to deduct must be used specifically for business. If you go into that room, sit at your desk and read the newspaper, do a crossword, watch TV or surf the internet, you can’t deduct it…period. It must be used for business 100% of the time. The only exception is if you store inventory there like an Avon, Amway or other type of sales/marketing rep.

I got around the requirement in this way, I live in what is called an unincorporated part of the county. (I live in the woods at the end of a dirt road) I am allowed to hang an occupational license at my house because we have no “walk up” traffic, so no parking space requirements.

I bought a 12 X 16 portable shed, placed it on the property and hang my occupational license. I get all the benefits of having an office space at my home with no IRS hassles

Yes, I’m aware that deducting for a home office is somewhat tenuous. Definitely something requiring research and careful thought.

Agreed. The thing I dont understand though, is why this is. If your home office is used 50% of the time as your business office, you should be able to deduct a small percentage but my understanding it is either 100% or nothing.

That is correct. In December, the IRS ruled something similar for cell phones. Unless you bought a phone and started cell phone service specifically in your business name, you cannot deduct the monthly service. If you make personal calls on it, you can’t deduct it.

IRS says that it is a business phone. If you want to call your family, get another line for personal and carry 2 phones. If you had the service and the number before you started your business, even if you conduct 100% business on it, you cannot deduct the monthly service bill

The records are too easy for them examine to find personal calls, you will lose

Would they take the time to do something like this?

I want to deduct what I pay in taxes…can I do that? LOL

I would think they would because thats more money for them when they bust you. They have poeple on payroll doing nothing but audits and personally I think those people get bonuses or something when they catch you.

I’m going to have to ask my tax preparer about some of this stuff because when I give him my tax stuff I have all my receipts in a 10x12" envelope. I have ALL my gas receipts, equipment receipts and receipts for truck payments, and cell bills and then he gets it as close as possible to even out so I don’t hardly owe…BUT I have only been doing a couple accounts once a month so my income is VERY small. This year I’m planning to actually work at window cleaning. I didn’t know that you can only write off the cell bill and car payments if they are ONLY for the business. I thought you could write of a percentage. Hmmm. I will be talking to him now.

I’ve been self-employed for eleven years and always have deducted cell phone. Here’s the secret just pay your taxes don’t try and get cute and your cell phone won’t raise a flag

You damn right they would. once they get a hook in you…they got you. And even if you are 100% right…they are going to drag you 100 yards on your ass to the end zone to make you prove it. You do not want to take the chance. I was audited once a while back…and its not a pleasant experience. I do not want to go thru that again…

Remember guys if you incorporate, AND act as a corporation Here is what you do;

Make Money
Spend as much as you can
Pay taxes on what is left

If you aren’t incorporated you
Make money
Pay Taxes
Spend what is left

Which seems smarter???

I incorporated in 2000 and am a Sub “S” and I have saved many many many thousands of dollars that I would of paid the IRS, had I not incorpoprated. One advantage is that when you incorporate, you personally own your company name, Trademarked company Logo, and trademarked tag line, and you lease it to your company, and get paid lease payments on it. You dont pay Social Security taxes on Lease payments. That is one of bookoo advantages you get when you incorporate. Why do you think you always hear about Major businesses getting huge tax breaks on everything. Remember, who makes the rules and tax laws. Politicians right? Have you ever met a poor politician? The rich find ways to keep most of their money and pay as little tax as possible.

We all work hard for our money, keep as much as you can!!

windowman