Taxes

[makethatmoney]

Another question:

In terms of "proving" business use, would it be more viable to just get 2 24" monitors than 1 32" TVMonitor?

Even if I use the 32" as my monitor, might it be looked at differently?

Thx

 

[legacy]

The best advice I could give you is if your making 30k+ then I would definitely think about setting up a corporation or an LLC. I would definitely look into finding a CPA to advise you on what you should do. Its better to spend a few bucks on a CPA to get the correct answer to your question.

Thats the worst advice someone can give a business. The smart thing to do is to open a corp when you are making over $100k +. The IRS doesnt give two shits about you if you are making under $100k as a salary. You will probably never get questioned by them, as they have bigger things to worry about.

Open a Sole Propreitor account, when registering your business. This is the best thing you can do in your income bracket. Taxes are not high because you can write off many expenses.

So the monitor would as well. Could I write off 75% of it if that's how my time is divided?

How would I "prove" 100% business use?

No one gives a fuck how its used. U made the profit, u spent it for business. Its fine, no one comes to check. Unless you are doing tax evasion on millions of dollars. Then they give a fuck about you.

Another question:

In terms of "proving" business use, would it be more viable to just get 2 24" monitors than 1 32" TVMonitor?

Even if I use the 32" as my monitor, might it be looked at differently?

Thx

Are you fucking kidding me?

 

[makethatmoney]

No I wasn't that's why I asked.

 

[johu]

No one gives a fuck how its used. U made the profit, u spent it for business. Its fine, no one comes to check. Unless you are doing tax evasion on millions of dollars. Then they give a fuck about you.

The IRS is concerned with how it's used. If you get audited, then someone will check. Anyone and everyone is open to an IRS audit - Study: IRS audits more smaller busineses, eases up on larger companies - .

 

[ComfortablyNumb]

Huge corps write off lap dances for hot shot clients all the effing time, give me a break. If I want a fucking 50 inch plasma for the sole reason of to impress the 3 clients that come to my home office a year I will buy it, its my fucking business and my money. Man where has the spirit of economic freedom gone? Its kind of scary that people are seriously asking if the government will let them buy a fucking $500 monitor. Are we even in Ameria anymore? Go Obama go redistribute that wealth.

Thank you for making me want to vomit. Find a republican CPA you know .

 

[makethatmoney]

Just making sure I'm covering my ass. The last thing I want to do is deal w/ extra bs

 

[johu]

Huge corps write off lap dances for hot shot clients all the effing time, give me a break. If I want a fucking 50 inch plasma for the sole reason of to impress the 3 clients that come to my home office a year I will buy it, its my fucking business and my money. Man where has the spirit of economic freedom gone? Its kind of scary that people are seriously asking if the government will let them buy a fucking $500 monitor. Are we even in Ameria anymore? Go Obama go redistribute that wealth.

Thank you for making me want to vomit. Find a republican CPA you know .

I wasn't saying that you need to buy the item for business use, but you just have to be able to show that you are using it solely for business if you were ever audited. For instance, if you bought a 50" plasma and deducted it as a business expense, if the IRS was auditing you, that screen better be in some sort of business-use environment, and not in your kid's room with cartoons playing. Otherwise, you're blatantly violating the tax code. Taking out clients to a strip club is deductible as a business expense. Buying a car and deducting it as a business expense doesn't work - There are very specific rules in play to make sure that people don't cheat by trying to write off personal expenses as business expenses.

As for having a democrat or republican CPA, I don' think that makes a difference. Go for a CPA that used to work for the IRS. The guy I use used to work for the IRS, and knows all the intricacies of what writeoffs in what categories (which are very flexible) tend to flag accounts for audits, but he still figures out ways to find stuff to write off that I didn't even think of.

 

[ComfortablyNumb]

Sorry, Obama has me all pissed lately.

Ex IRS sounds like the way to go regardless of political association. What I really should have said that a 32inch monitor is nowhere close to as wasteful or illegitimate as much bigger and more public corporate write offs out there. A good friend of mine day trades he just spent a ton on 6 22inchers with a mounting system so he can run and see all his charts as fast as possible. Companies run up bills with staples ordering snacks and candy that will dwarf your $500 monitor.

 

[makethatmoney]

Ok, thank you The issue is this: I live in an apartment and my home computer is also my office computer. Therefore, my monitor will be used for business use, yes, but also personal use. I'm just wondering if I would only be able to write of a certain percentage of it or just say "it's for business, it's a writeoff"

Thanks for the input so far guys, really

 

[redmonkey]

My individual phone plan is including data plans and other features which cost about $100/month and i'd write them off since it's mainly used for business(though i haven't thought of tax yet). Don't take my advice officially. You should talk with other people that know about this stupid system...

 

[WickedJoe]

I gotta few questions too being new to the whole Self-Employed thing. I'm in the US.

Self Employment Tax - I have to say that nothing pisses me off than the idea of this tax. Our generation will likely see no benefit from Social Security but yet this tax is a whopping 15%!! Baby boomers, if you care about your children please put a bullet in your head. Seriously.

I'm considering not even filing taxes at all because of this shit. Is there a legal or semi-legal way to avoid this tax. I don't want to do an S-Corp really and it's prob too late in the year to do an S-Corp anyway.

Bank Reporting to IRS? - Does the IRS have access to your bank account info even if they're not doing an Audit? Lets say you have 60k coming from Paypal in chunks of 5k per month into your Citibank Checking account. If you decide not to file taxes does the IRS look at your US bank account anyway then somehow flag you for audit?

 

[imincognita]

I gotta few questions too being new to the whole Self-Employed thing. I'm in the US.


Bank Reporting to IRS? - Does the IRS have access to your bank account info even if they're not doing an Audit? Lets say you have 60k coming from Paypal in chunks of 5k per month into your Citibank Checking account. If you decide not to file taxes does the IRS look at your US bank account anyway then somehow flag you for audit?

The minute your dough hits the bank, you've left a paper trail.

 

[imincognita]

Thats the worst advice someone can give a business. The smart thing to do is to open a corp when you are making over $100k +. The IRS doesnt give two shits about you if you are making under $100k as a salary. You will probably never get questioned by them, as they have bigger things to worry about.

Absolutely untrue. The IRS will routinely pull an industry out of their hat and preform random audits. One year it may be Sch E filers, the next, used car salesmen. Even if only 1/2 of 1 % of all returns are audited, statistics don't mean shit if your one of those chosen. And if you really want to have a good time, try defending your position in a compliance audit. They will strip search every line of that return with a value in excess of $100, and you better have the documentation to back it up.

 

[johu]

I'm considering not even filing taxes at all because of this shit. Is there a legal or semi-legal way to avoid this tax. I don't want to do an S-Corp really and it's prob too late in the year to do an S-Corp anyway.

I don't agree with the law that I have to stop at red lights when there's no traffic coming the other way, since it just slows me down. Is there a legal way to run red lights?

What is this, Digitalpoint? Of course tax evasion is illegal! Any US company that paid you more than $600 (or is it $400 now) reports that income to the IRS - Remember all of those W9s you had to fill out? It doesn't matter if you have that money paying into a Swiss bank account - If you gave a company your SSN/TID, and made more than $600, the IRS will know. You'd be an idiot not to report it.

 

[redmonkey]

I don't agree with the law that I have to stop at red lights when there's no traffic coming the other way, since it just slows me down. Is there a legal way to run red lights?

What is this, Digitalpoint? Of course tax evasion is illegal! Any US company that paid you more than $600 (or is it $400 now) reports that income to the IRS - Remember all of those W9s you had to fill out? It doesn't matter if you have that money paying into a Swiss bank account - If you gave a company your SSN/TID, and made more than $600, the IRS will know. You'd be an idiot not to report it.

I'm a tax noob and have some doubts. What if you never gave your network W9(they're based on int'l) and they wire you everyweek to your bank. Do i have to pay for the tax too? If so, can't i just claim that that's fund my relatives oversea sent me(yes, like they usually did)?

 

[ROIShareTeam]

I'm a tax noob and have some doubts. What if you never gave your network W9(they're based on int'l) and they wire you everyweek to your bank. Do i have to pay for the tax too? If so, can't i just claim that that's fund my relatives oversea sent me(yes, like they usually did)?

That doesn't matter, you must report those earnings, even if they come overseas. If you wanted to evade reporting, then you would open a bank account overseas, and have the international company send you your payments directly there. But still, dangerous stuff.

 

[redmonkey]

That doesn't matter, you must report those earnings, even if they come overseas. If you wanted to evade reporting, then you would open a bank account overseas, and have the international company send you your payments directly there. But still, dangerous stuff.

Which mean i have to report the money that my mom sends me from overseas too? Any ideas? I mean, what makes the deterrences?

 

[WickedJoe]

Any US company that paid you more than $600 (or is it $400 now) reports that income to the IRS - Remember all of those W9s you had to fill out? It doesn't matter if you have that money paying into a Swiss bank account - If you gave a company your SSN/TID, and made more than $600, the IRS will know.

I don't work for other companies. I filled out no W9's. I sell stuff and get paid from individuals through Paypal. Am I still at as high a risk? I'll prob shell out the taxes anyway, but Self Employment tax is utterly ridiculous.

So pretty much only Paypal and my real bank know about my income.. I'm guessing that's a big enough paper trail that I should def pay taxes.

 

[ROIShareTeam]

Which mean i have to report the money that my mom sends me from overseas too? Any ideas? I mean, what makes the deterrences?

Depends on the reason for why she is sending you that money.

I have my accountant handle all this for me, and I know that we pretty much report EVERYTHING to stay on the safe side, much better to lose thousands than being put in the slammer.

 

[ROIShareTeam]

I don't work for other companies. I filled out no W9's. I sell stuff and get paid from individuals through Paypal. Am I still at as high a risk? I'll prob shell out the taxes anyway, but Self Employment tax is utterly ridiculous.

So pretty much only Paypal and my real bank know about my income.. I'm guessing that's a big enough paper trail that I should def pay taxes.

Paypal isn't going to report anything to IRS for another 2-3 years. So if you just cycle couple hundred dollars a year in your Paypal for now, your fine by not reporting it.