outsource a tax write off?
- Thread starter sm00th
- Start date
JonesersRX7
Regular Member
- Mar 24, 2009
- 201
- 154
It is a business expense.... so yes. Keep track of all your expenses.
JonesersRX7
Regular Member
- Mar 24, 2009
- 201
- 154
Yep, exactly. And you should really look into an accountant. 400-800 bucks if you have your stuff fairly organized. Look into quickbooks or even quicken small business.
Makes life much easier plus the money you will save will always be at least double the cost.
DISCLAIMER: I'm not an certified public accountant or any other type of accountant. This does not serve as tax or legal advice.
If a business expense occurs that is required to operate the business, the expense can be deducted al long as it is for the purpose of operating the business entity.
In short, hire an accountant. Why not outsource your tax planning to a CPA? (In the US, of course)
If a business expense occurs that is required to operate the business, the expense can be deducted al long as it is for the purpose of operating the business entity.
In short, hire an accountant. Why not outsource your tax planning to a CPA? (In the US, of course)
I just wanted to chime in and confirm what others are saying. I AM a tax professional and I teach tax education courses.
Any legitimate expenses, including contracted labor, can be deducted from business income. That, of course, means you also have to declare that income. Small business income such as you describe are done easily on a Schedule C (Form 1040) and reported along with your income from other sources such as employment.
What that means is that you can effectively reduce your tax liability if you have losses that exceed your income (as most small businesses do when they start out.) Of course, if you have profits, you will end up paying some additional tax. If you report more than $400 in self-employment income, you will also be responsible for self-employment tax (your share of medicare and social security taxes.) This is a good thing because it will count toward your retirement.
I would agree that you need to get some professional advice when you are just starting out. You might be able to rely on a good professional tax preparer if you don't want to spend the money on a CPA. Be sure to ask a lot of questions like where he got the numbers to put on each line of the tax return. If you learn what the tax preparer is doing, you may be able to figure it out for future years. A small business included on a personal income tax return is a fairly simple matter.
Hope that helps.
Any legitimate expenses, including contracted labor, can be deducted from business income. That, of course, means you also have to declare that income. Small business income such as you describe are done easily on a Schedule C (Form 1040) and reported along with your income from other sources such as employment.
What that means is that you can effectively reduce your tax liability if you have losses that exceed your income (as most small businesses do when they start out.) Of course, if you have profits, you will end up paying some additional tax. If you report more than $400 in self-employment income, you will also be responsible for self-employment tax (your share of medicare and social security taxes.) This is a good thing because it will count toward your retirement.
I would agree that you need to get some professional advice when you are just starting out. You might be able to rely on a good professional tax preparer if you don't want to spend the money on a CPA. Be sure to ask a lot of questions like where he got the numbers to put on each line of the tax return. If you learn what the tax preparer is doing, you may be able to figure it out for future years. A small business included on a personal income tax return is a fairly simple matter.
Hope that helps.