Self employed benefits-am I missing anything?

[tssdetailing]

I'm just curiuos is there any grants or anything from either the government or local groups that I might be missing out on as a sole-proprieter? I got pretty hosed on my taxes this year and now I'm wondering how to fill that void (besides work my balls off):violin:

 

[LaTuFu]

Depending on how much revenue your business generates, you have different tax deductions you can/cannot take.



I highly recommend spending the $200-$500 to consult a CPA. Take the time to interview a few of them (Initial consultations should be free. If they want to charge on the first meeting, don't meet) and find one that specializes in small businesses. They will be well worth their (deductible) costs in finding you deductions and organizing your business processes. A good one will work with you to help you set up your receivables and payables in a cost/time efficient manner.

 

[WAS]

Setting up as a corporation is another option. Aside from the fact that you would then be "employed" as opposed to "self-employed" (numerous things change, for example employment insurance, CPP (I believe you guys in the USA call it a 401k ?)), you also benefit from the personal removal of liability. Not to mention that your wages would then be deductable from company earnings.

 

[smokinfastlegen]

Having taken an income tax class and am completing a corporate income tax class, the best advice is to make sure you deduct all that you can on schedule c. All your products and pads are deductable, and if you buy a buffer, you can either depreciate that to give you a benefit (even though the cost wont be much.) If you have a mobile vehicle, you can depreciate that to give you a tax break, and i believe you might even be able to deduct the costs of fuel to get to those details (not 100% sure, but i think its possible because it IS an expense for your business.)

If you do the majority of work from your home, i think you might be able to expense a "home office" expense.



Still contact a CPA to see if there is anything else that you can deduct or get credited for.

 

[Scottwax]

Mileage is a big one if your vehicle has already depreciated a significant amount.

 

[WAS]

Mileage and fuel are definitely good deductions. However, you *should* keep a log book for your vehicle where you write in all mileage and fuel ups, in case you ever get audited.

 

[Shawn F.]

All great info here... Definitely get a CPA! Depending how much your making per year, you may need to step up to a corporation but again, get a CPA and they will let you know which to go with. Also as stated you can use your mileage, materials, etc as a write off and not sure if this goes with every state or not but sometimes you can write your home off as an office if you use it as such.

If you get a good CPA, they should know all about this stuff and in the end save you a ton of money.

 

[tssdetailing]

I used a CPA last year and again this year. I have 2 LLC's set up, one for detailing, the other for emblem design. I was honestly just seeing if there was any "free money" like a grant or something from the government that somehow I could apply for. Or better insurances. Really just seeing what can be done to put money in my pocket.

 

[WAS]

Or better insurances.

What kind of insurances ?

 

[David Fermani]

Having taken an income tax class and am completing a corporate income tax class, the best advice is to make sure you deduct all that you can on schedule c.

Exactly. Not too many things I didn't try deducting. Every time I purchased something other than groceries pretty much, I saved the receipt. I then grouped and totaled them at tax time and gave the info to my CPA for him to figure. Don't do taxes yourself.

 

[WAS]

Exactly. Not too many things I didn't try deducting. Every time I purchased something other than groceries pretty much, I saved the receipt. I then grouped and totaled them at tax time and gave the info to my CPA for him to figure. Don't do taxes yourself.

Unless you use any of the software from Intuit. It makes taxes VERY easy to do.

 

[smokinfastlegen]

Exactly. Not too many things I didn't try deducting. Every time I purchased something other than groceries pretty much, I saved the receipt. I then grouped and totaled them at tax time and gave the info to my CPA for him to figure. Don't do taxes yourself.

Your CPA must love you, I know I would if I had all the receipts. One of my assignments for my class was to do the taxes for a person who file jointly, had their own business, yada yada yada, the worst thing I can say about it, the schedule for self employment and making work pay.



As far as using your home as an office, there are alot of rules that go with that. Id say if you do detailing out of your home instead of doing it mobile, it would be a great deduction, as any upgrade to your garage could be deductable, but there are rules you have to follow.

 

[David Fermani]

Unless you use any of the software from Intuit. It makes taxes VERY easy to do.

It may be for you, but I'll always cop out and have my Accountant prepare them. Peace of mind knowing that a Professional is correctly calculating all my possible deductions. I'm just not that hands on I guess. Even after taking 2 classes of accounting in High School and 2 in College.

 

[WAS]

It may be for you, but I'll always cop out and have my Accountant prepare them. Peace of mind knowing that a Professional is correctly calculating all my possible deductions. I'm just not that hands on I guess. Even after taking 2 classes of accounting in High School and 2 in College.

I definitely wouldn't do them by hand, I'll agree with that. But with the software driven ones these days, they calculate all your deductions for you, all you do is input data. It's really easy, you should give a demo a try, I think you'll be surprised.



I guess it depends on how you're keeping records for your business as well. And whether you have a separate business bank account, how you pay your expenses, etc. If you're using Quickbooks or Simply to do your accounting, and you're keeping track of everything as you go, then doing your taxes is very, very simple. If all you have at the end of the year is a drawer full of expense / invoice receipts, then yeah, I'd definitely get a professional to go through it.