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Taxes, Financial Aid, help?

Discussion in 'Business & Tax Advice' started by jamesjr7, Jul 18, 2010.

  1. jamesjr7

    jamesjr7 Registered Member

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    Hello! So right now I am making about $10,000 to $15,000 a year through AM.

    For the past three years, I have been filing yearly and paying around $3,000 in taxes at both the state and federal level.

    I would like to take advantage of "writing things off", but have no idea how to do it, what records I am supposed to keep, etc.

    I am 18 and am entering college. Any money I make is looked at through the FAFSA which determines how much I should pay out of pocket toward my tuition. Would it be best to form a real company, have the money go through that, and then it would be ignored as personal income? Of course I would have to cut myself a paycheck as needed, but the rest of the money could sit in the company until a later date. I do not plan on really getting "employees" or anything.

    What is best?
     
  2. volund

    volund Senior Member

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    You have not been writing off any of your expenses? Paying way too much in taxes for sure.

    Basically you can write off any legitimate business expenses by filing a schedule C with your 1040. It is not very difficult and with the amount of income you are talking about that would usually be my recommendation. Adding FAFSA into the mix changes things however. What I would do is take my income subtract all my expenses and see what my net is. Plug that into a FAFSA calculator and see how much it affects your student aid. If it makes a big difference then look into creating a corp or llc.

    The only problem I see is that I am not sure if you create a corp now if you can push all your income from earlier in the year into it. For that you will need some professional advice. First though I would figure out if your net is going to affect your student aid. If not then I would just go with a schedule C.

    If you have your receipts and/or do have your past years expenses documented you may want to talk to an accountant for that as you can file an amended return gong back up to three years I believe. This would allow you to get back some of the money you have overpaid.
     
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  3. BassTrackerBoats

    BassTrackerBoats Moderator Staff Member Moderator Jr. VIP

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    I would absolutely form a corp or LLC... you should really talk to a local bookeeper to get ou set up properly to pay your taxes quarterly as well as finding out all the little things you can write off.
     
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  4. jamesjr7

    jamesjr7 Registered Member

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    So I need to keep receipts and such? So even if I do not OWN a business, I can still write things off?

    I just bought a laptop for school, could I say I use it for 50% marketing (true)?

    Thanks so much for your help!
     
  5. loclhero

    loclhero Supreme Member

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    I totally disagree with people who automatically say to form a corp or llc.
    Next year, do your taxes on turbotax. One of the forms you'll use is a Schedule C. This is your business which by the way you do own. If you receive 1099's from your affiliate networks, you are self employed. Even if you have another job.

    And yes, you can write off expenses that you use to make money but you do need to keep records or receipts. In my case, while my income is pretty high, my expenses are so minimal it's barely worth it. I do have advertising costs but my biggest write off is my home office. I'll assume you do not own a home so that wouldn't apply. As for your computer, yes you can say you use it X% of the time for work.