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Tax write offs #182662 12/05/08 08:01 PM
Joined: Oct 2002
Posts: 830
S
sparkync Offline OP
Member
It's almost the end of the year again, and I'm thinking about investing more of my money in office equipment, tools,etc. I'd rather have something for my money, than send it to Uncle Sam. I think I need it more than he does. Of course the hard thing is to pay it back, but I'll have to pay Uncle Sam anyway. What are some other thoughts on the matter? I don't really have the money to spend, but if I don't spend it on the company, I'll sure have to give it to the gov. Steve...

Business, Office, Estimating, Legal:
Re: Tax write offs [Re: sparkync] #182664 12/05/08 08:38 PM
Joined: Jan 2005
Posts: 5,316
renosteinke Offline
Cat Servant
Member
This is what you pay your CPA for: professional guidance as to making such purchases.

At this point, you ought to have a pretty good idea as to your tax liability. This weekend, play "let's pretend," and prepare your taxes as if the year was over. How much do you owe?

Now, do it all over again, only add, say, $3000 in office expenses. How does it change your bottom line? How much does it affect your tax obligation?

The 'dirty little secret' regarding tax deductions is ... you have to first make the money, before you can spend it. All the write-offs in the world won't help you if your business is already marginal.

In short, buy / lease something first of all because you need it, and it will carry itself. Any tax savings are but 'gravy.'

Re: Tax write offs [Re: renosteinke] #182667 12/05/08 09:45 PM
Joined: Mar 2008
Posts: 144
JoeKP Offline
Member
Yeah, i agree with John.


-Joe
“then we'll glue em' then screw em'”
-Tom Silva
TOH
Re: Tax write offs [Re: JoeKP] #182680 12/06/08 02:22 PM
Joined: Oct 2002
Posts: 830
S
sparkync Offline OP
Member
My tax preparer said all my tools were 100% deductible, and that a new computer etc. could be 100% deductible in one year, and not have to be depreciated. The bottom line of my taxes is that I expect to have to pay a bunch, around $5500.00 at least. Yea, I know, I should have been paying on it through the year, but haven't been able to consistantly. Thanks for the input.

Re: Tax write offs [Re: sparkync] #182682 12/06/08 03:22 PM
Joined: Jul 2004
Posts: 9,394
G
gfretwell Online Content
Member
When I had my business I always did the "lets pretend" John was talking about in December to see if it was a good time to buy something. If you are really going to be sending Sam money and there is something you need, December is the time to buy it.
Careful timing and a sharp pencil on your schedule C can reduce your taxable profits. Don't forget any "expenses" when you are tallying them up.


Greg Fretwell
Re: Tax write offs [Re: gfretwell] #182694 12/06/08 11:43 PM
Joined: Oct 2002
Posts: 482
Z
Zapped Offline
Member
Interestingly enough, boots are deductible and jeans are not. Of course, tools and administrative costs are deductible (including your computer), and your truck if you use it only for business.

Anybody have any other tips on deductions out there? Be sure before you post, as I have been audited, and I can tell you, it is no picnic. They allow no "gray" areas whatever.

Re: Tax write offs [Re: Zapped] #182704 12/07/08 02:58 AM
Joined: Jul 2004
Posts: 9,394
G
gfretwell Online Content
Member
I was a contractor/inspector, paid on a 1099 and filing on a schedule C when I was working (retired now).
I always deducted the cost of CEUs and the various code books, CDs etc. That can be quite a big number if you get the whole set every cycle (electrical and building).
The strange thing was my books and disks was my biggest asset when it came time to pay my tangible taxes. My PCs were all junkers when I started and I never really had more than a hundred bucks in them through any given tax year.
I managed to get away with the dreaded home office too. Just keep good records. I had one audit and they ended up giving me money.
I still pay tangible taxes on my code books since I keep my license up but since I don't have any revenue I can't write anything off.


Greg Fretwell
Re: Tax write offs [Re: gfretwell] #182706 12/07/08 09:47 AM
Joined: Jan 2002
Posts: 1,457
E
Electricmanscott Offline
Member
Spend, spend, spend! Help the economy, get some writeoffs. smile

I have done more than my fair share this month. Probably too much. cry

Re: Tax write offs [Re: Electricmanscott] #182726 12/08/08 12:03 AM
Joined: Dec 2000
Posts: 4,281
electure Offline
Member

Re: Tax write offs [Re: sparkync] #182774 12/09/08 09:29 PM
Joined: Oct 2002
Posts: 830
S
sparkync Offline OP
Member
I started buying tools today, setting up ads in yellow pages,newspaper, and looking into getting a new computer setup. Thinking of other ways to advertise. I think that is my main goal now. I GOT to get some work to pay for these things. crazy I guess I've always got the option to travel. I may have to if I can't pay for this stuff grin Steve.....

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