Business write-offs, or not

[yazbird8 17]

Matt,Your square with me..........

Jeff, Great post, Thanks......Also save and catagorize all receipts as best you can.....I understand there are about 20-25 different catogories to place your deductions in. It saves on your accounting fees.

[JFife 14]

Ken,

WHY NOT deduct off the wall expenses?? They are yours to deduct! Like you said, you wouldn't lose a bit of sleep if you got audited. I wouldn't either!! So worst case scenario--you deduct, say, a trip to Europe because you handed out several biz cards in transit and on your stay, to work towards establish the impending world-wide dominance of PressurePros, while eating hotdogs on the French Riviera. You get audited, you fight it out, you lose, and you pay back the money with a penalty and interest!! It's not that bad! When I was either 18 or 19, I went the year and didn't file taxes at all. Nada. I finally filed a few years later and with the penalties, etc., it probably cost me a few hundred dollars. No men in black suits outside my door.

I say, get guerrilla with your deductions in a good conscience, unless you need to show a high income, like my example about buying a home. IF YOU ARE PUTTING MONEY BACK IN THE SYSTEM, YOU SHOULDN"T BE TAXED FOR IT!!!

Matt---don't apologize or delete anything on my behalf. I love good arguments, and you are holding me accountable on what we probably agree would be ethical issues, moreso than tax-related. Post whatever you want to say to me or about the subject, makes for good debate. If I was insulting I apologize. I think Canada would be a nice place to live:). Continue with your point--very conscientious, meaningful, and shows you take your ethical standards seriously.

Yazbird, healthy debate is GOOD, ENTERTAINING, and GETS RATINGS! What else do you have in mind in the realm of deductions??

[JFife 14]

.....I understand there are about 20-25 different catogories to place your deductions in. It saves on your accounting fees.

Do you have a link for this?? I keep everything/anything, but am always looking for ways to be better organized, as that is a problem of mine.

[yazbird8 17]

Jon,

I need to go to my sisters tomorrow and I will pick up the book that has the catogories in it. It's a no nonsense book without all the tax gibberish that ends up confusing more than helping. It is the first book where I said to myself "hey I kinda get this stuff"...........I will certainly get back to you tomorrow.

[Big Bill 14]

I have been audited by the IRS - before I had a small business. I was in my late 20's & it scared the crap out of me. I do my own taxes, have done them for years. i am involved in a few different, complicated, ventures that have been in my family for quite a few years. Some of these ventures are profitable, some are not profitable every year. I have also lived & worked overseas for a few years in the past, which was a great tax advantage.......tax free up to $80k. The IRS audits can be pure hell, cause you sleepless nights & lots of anxiety. The agents (2) that handled my audit were intimidating, ruthless. They came across as gastapo like idiots. In the end, I ended up owing them a little over $1k. I felt good about it in the end. Since I bought my first computer, I have used Turbo-Tax to do my own taxes, it has not failed me yet. KEEP ALL RECIEPTS. If you take a client to lunch, write on the receipt who it was, what you talked about. If you bought potential clients a dozen donuts for $4, keep the damn receipt. Also use the depreciation advantage on all of your equipment. There are so many tax advantages to owning a small business it is unbelievable. If I use anything for a deduction, I always have a receipt to back it up. My situation is alot different than most people in the pw business, as I only do this part time, so I don't think I know everything, hopefully I know just enough to pay only the taxes that I am required to pay, & KEEP THE IRS OFF MY BACK!

[squirtgun 122]

Just remember THE IRS when combined into one word = THEIRS

[RyanH 14]

With write offs, you *should* be able to write off anything outside your normal course of living that is directly responsible for your income. You see, if the government is going to penalize acheivers with a higher tax base, the only thing keeping the acheivers from a full-blown tax revolt is to allow them to deduct the expenses that allowed them to earn the money in the first place ("them" being acheivers; government doesn't "earn" money, it takes it by force).

One could very well argue that part of being a successful salesperson (as most of us have had to be as self-employed individuals) is presenting a positive appearance. If strippers can write off breast implants as a job cost, salespersons should be able to write off personal enhancements that improve their appearance, such as haircuts, physical fitness, clothing, etc. Technically, you should only deduct the percentage of your expenses that are used for your business, though. If you see customers for 8 hours of the day, one could argue that your haircut is only helping you on your job for 1/3 of the day, so you could only deduct 33% of the cost. Same with other personal expenses. You can deduct a percentage of your personal vehicle expenses if you use your personal vehicle to travel to jobs or proposals. For some reason, however, this does NOT apply to driving to your daily place of work (if you work in the same place everyday). You can deduct fees for preparing your taxes (the cost of the TurboTax program, for example), a portion of your internet cost if you use it for business. I don't think you can include meals though unless you are taking potential clients out and have reasonable expectation to gain future business from that meeting. Of course, I guess it can also be argued that being alive is a requirement to work, and that eating is a requirement for living, so eating is a requirement to work and is a deductible expense. I read somewhere that a test was done where identical tax information was given to a number of tax accountants/IRS accountants and every one was done DIFFERENTLY, so I'm betting the auditors who come to your door won't know with absolute certainty the legitimacy of this type of logic in your deductions.

As for Matt's comments regarding my willingness to pay taxes...how do you define "fair share?" Personally, I feel that every American *should* receive equal benefits from having a government. Military protection, FDA protection, etc. However, as it stands, those who earn more are penalized with a higher tax base. In the name of political correctness, my money is taken from me (by force, mind you) and given to others. Those hurricane victims? I'm all for helping to rebuild the devastated area and providing assistance to the area. I voluntarily gave a very generous porion. But when some of the displaced get lawyers (who pays for the lawyers if those who hire them can't even afford housing???) to prevent the government from withdrawing funds for hotel rooms after 6 months, I'm sorry but my spirit of giving diminishes. And when the government caves in and extends the stay, then I feel a little less like giving into that system. Just because the law says I *should* pay a particular amount doesn't mean that it is *right* and as long as tax payers are complacent the burden will increase.

[yazbird8 17]

Jon,

Here is the link to the book.

http://www.amazon.com/gp/product/0762730714/ref=pd_bxgy_img_b/104-5844137-5570332?%5Fencoding=UTF8

This is the book I will use as my model. It will make my life easy..... and my accountants.......I read this book and used a highlighter as I went.... I just need to buy the 23 folders and then catogorize all of my saved reciepts (at my own leisure). A very easy read and a good confidence builder for me.......................

PIECE OF CAKE

I am in the process of reading the other book that is coupled with this book.

ANY OTHER GOOD BOOKS OUT THERE?

[Able Hands 14]

Since this seems to be taking on a life of it's own, I will start a new thread. Please see "Government, what a MESS"

Sorry for the interruptions yazbird8

By the way, I'll be looking at a copy of that book tomorrow hopefully.

Matt