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Taxes

Discussion in 'Business & Tax Advice' started by agag2, Apr 7, 2013.

  1. agag2

    agag2 Supreme Member

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    Hey

    If I made $5,000 selling online services or through clickbank then I invest $1,000 - $2,000 on creating a software (for other business purposes) can I write this amount off my tax bill as a deduction? Also what if I made up to spend 2k and thus far only sent the programmer 1l can I deduct the full 2k?


    Im from the USA.

    Thanks
     
  2. Panther28

    Panther28 Elite Member

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    easily, if the rich do it then why the hell can't you! You should consult an accountant, but tell him that you want to do this, don't wait for him to offer you any ideas.
     
  3. artizhay

    artizhay BANNED BANNED

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    You can deduct it if you get the proper paperwork (W9, 1099, etc). I'm not sure about deducting expenses that haven't actually been spent yet. That seems like mark-to-market to me, the technique Enron used to show revenue that was projected, not actually made, except the reverse of that.
     
  4. myownhero

    myownhero Power Member Premium Member

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    You can't deduct more than you spent. That should be fairly obvious.

    Talk to an accountant, the rest of your life you'll be dealing with both lawyers and accountants so it's probably a good idea to start now.
     
  5. Furious George

    Furious George Supreme Member Premium Member

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    wow.... someone needs an accounting class. You can deduct expenses that haven't actually been spent if you operate on an accrual based accounting system. You're required to operate on accrual if you deal with more than a million dollars in a calendar year. A lot of people think cash accounting is simpler, and sometimes it is. Basically, you assume you have expenses and income, and then you go back in and verify this income and expense. If you have income that didn't come in, that's written off as bad debt. if you have expenses that you didn't end up paying, well, you don't write them off. Often times these are overlooked unless an audit takes place. Rent is a perfect example of an assumed expense. It's due every month... but whether or not you cut a check is a different story.
    All income needs to be reported, whether provided with a 1099 or not. If someone pays you 500 dollars for work in a year, and doesn't give you a 1099, you still pay tax on that income. Even on a dime, it doesn't matter. 1099's/w9's only have to do with tax reporting. It has nothing to do with eligible tax deductible expenses. That has NOTHING to do with what enron did, and this has nothing to do with mark to market accounting. Enron falsified income statements and hid their debt in fake companies.... which caused the stock to overinflate, then plummet when sh!t hit the fan. They may have used mark to market accounting to falsify income statements, but that's not what the OP has in mind. Income statements are not the same as tax returns. You will have a P&L sheet that doesn't match your tax return, because it's all different. Mark to market accounting is considered a GAAP, and it's used quite often. It deals with changing market conditions, and you probably need not worry about it.

    OP
    Soooo.... first of all, you do need to talk to an accountant.
    Second, a lot of things that are not one time use are placed on a depreciation schedule. For example, if you purchase a car for your business, you don't get to write off the expense of the car for that one year, you have to depreciate it over several years. Most likely, that will be the case for software. However.... if you were to pay someone 2k for consulting, then that's a different matter. You have to determine if you're left with an asset after the purchase. Purchasing a computer has to be depreciated (in terms of taxable income)... because you're not just using that computer one time. It's considered an asset, with a certain number of years it can be used.

    Are you saying you are going to bullshit the IRS? Good luck with that one... if you pay someone more than 600 dollars as a contractor, you're requried to furnish them with a 1099 form for the work they did... this declares the amount of money you paid them. You also have to send a copy to the IRS, so they know how much money the contractor made. You can't bullshit this. Even if you were to say "I paid this guy in cash" When you get audited (because you're probably going to with these questions you're asking) they will delve into every aspect of your life and business. They will investigate it. If you get caught lying, you will go to prison. Federal pound me in the ass prison. But you'll most likely go to a camp...

    You will receive a 1099 (so will the IRS) from clickbank when your earnings exceed 600 dollars. If you make 5000 dollars, and have 2000 dollars worth of eligible tax deductible expenses, yes, you can write it off so your gross income would be 3000. If you pay to have a piece of software developed that is used for your business, most likely that is tax deductible.

    Yes, your tax deductible income can be in the negative. You can deduct more than you spent in many circumstances. This happens many times when there are losses from a previous year that carry over, or even when mileage exceeds actual cost of driving.

    Talk to an accountant. Get professional advice. A good accountant will help you explore write offs you haven't thought of, like maybe interest on your home mortgage, or a home office, or gambling losses.
     
    • Thanks Thanks x 1
    Last edited: Apr 7, 2013
  6. artizhay

    artizhay BANNED BANNED

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    I believe I said "I'm not sure," which qualifies my statement, something your puny mind has failed to identify. I haven't read your post due to your blatant inability to read. If someone says they do NOT know something, being an asshole and shoving their already admitted knowledgeable shortcomings in their face is ironically and childishly moronic. If you're on your period, that's a personal issue, but no need to take out your continuously flaunted idiocy and anger on me.

    I clearly said I don't know if he can do that and followed with an opinion, you shit-brained, dim-witted child, so there's no logical reason outside of mental disability that would give you a respectable reason to respond as though I acted as if I did know and feebly attempt to put me down with your ugly, pretentious attitude. Hopefully your shriveling laughable excuse for a brain can comprehend these elementary ideas, but that would be dreadfully hopeful on my part.
     
    Last edited: Apr 7, 2013
  7. Furious George

    Furious George Supreme Member Premium Member

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    Look at at what you said, then look at what I said.
    Maybe if you don't know you should shut the fuck up. I'm not being an ass, I'm responding to misleading statements by providing my expert opinion. And ya know what, I'm 100% right. My shriveling laughable excuse for a brain just owned everything that came outta your immature mouth. You always start sh!t with people. This is a forum. If you can't deal with someone saying something different, then GTFO.
     
  8. artizhay

    artizhay BANNED BANNED

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    Except, of course, if you were honestly trying to help me, your rude allusions to my lack of knowledge would not have been present. Perhaps you should follow your own advice and read my ORIGINAL reply, which provided an opinion but not founded fact, to which you replied with arrogance and continue to reply with arrogance.

    I provided my viewpoint, then you put me down and blame me for starting something? Two out of three encounters I've had with you were started by you, proof available in post history. And getting more shit-brained every time. Because if you were trying to help, you'd have also responded to the person after me who said the same thing in a different manner, but you exclusively and blatantly quoted my post and insulted me.

    I never said you weren't right, nor did I say I know more than you, so if you feel challenged, that's a personal problem. I provided my non-expert opinion and you felt the need to indirectly call me an idiot. Not exactly something to be proud of, but congrats on all of your shining experience, child.

    I can definitely handle someone contradicting my statement and providing founded advice. It seems to be you, however, that has trouble with people providing their opinions, as you've flawlessly demonstrated over and over.
     
    Last edited: Apr 7, 2013
  9. Furious George

    Furious George Supreme Member Premium Member

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    I felt challenged? WOW.... yeah, okay man. Sure buddy.
    It's all bullshit. You can't argue with anything I said, so you're diverting attention with insults. I didn't come right out and SAY you're a fucking idiot... you just kind of made yourself do that. This looks to me like you just said some shit to say it to try and make yourself appear smart. You were wrong, get over it. I didn't put you down until you started acting like a twat. I didn't indrectly call you an idiot. I thoroughly and calmly explained in detail that you were incorrect. I hope what I wrote gives you a better idea of what you need to learn. Maybe if you were successful at IM you would have some basic knowledge about taxes. In all seriousness, you probably do need an accounting class, and a beer.

    Oh, you're referring to your whored out pyramid scheme? Haha....

    You're blowing this out of proportion because you're a child. You have an inferiority complex.
     
  10. Furious George

    Furious George Supreme Member Premium Member

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    Quite clearly, you cannot.
     
  11. assphuck

    assphuck Senior Member

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    I know a lot of people will be trying to write off their toilet paper purchases after losing their ass with Google's algo brand updates. :)

    For the record, you don't have to 1099 a corporation. Obviously sending 1099s to people overseas is not required either. As was noted previously, with a cash accounting system you can write off your expenses, even if the software you are working on is not fully developed. Speak with a GOOD accountant that understands internet marketing. I had to fire a few before I found the right accountant that had experience in dealing with digital goods/services.

    Tax day is coming soon. Write off everything you are entitled to so those bozos in Washington D.C. don't have anymore money to waste then they already do. Good luck.
     
  12. Furious George

    Furious George Supreme Member Premium Member

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    llc's will receive a 1099 if it's taxed as a sole proprietor (pass through taxation)

    It's a good idea to keep and maintain detailed records when you plan to make write offs. That's very good advice about finding the right CPA. You really have to find one that is smart and understands your business.