Thread: Business taxes

Any good sources on business tax write offs etc? I seem to learn something new every year and the accountant seems to tnrow in one tip at a time. If anyone can point out a book or link to some business tax info Id appreciate it. Im in Michigan as Im sure they very from State to state.


Todd

Tax Information For Businesses

taxes and deductions vary state to state, but mostly conform to federal laws.

i think your question is a little too broad. perhaps if you were more specific to which industry you are a part of it might help.

Rignt now I have side work working as an independent contractor restoring vehicles for a production shop. I know I can write off my tools etc, but last year I learned I could write off the medical portion on my car insurance. Although it wasnt much it was something and I need some write offs. I havent really bought too many tools or items this year. My thought was maybe a few business owners could chime in with some of the stuff they use or learned to use.

I also have a website that I havent made much on. It doesnt relate to the above work, but at what point can I write off those expenses or cant I? Im new to IM and not sure when or if I need to register that as a business.

i haven't heard about the car insurance medical liability deduction. not sure how that individual expense qualifies separate from your auto insurance.

you can only take deductions that apply to your business. for example, if you have a personal vehicle that is used to visit clients, you are not allowed to deduct the whole expense (lease or depreciation/upkeep), only the percentage you use it for business.

durable goods have to be depreciated over time (the irs has tables/charts for this). general tools have a 7 year depreciation life/computers 5 year, etc. if you sell the tool, the depreciation must be re-captured and added to your income.

in your work situation, licensing, advertising, disposal/waste fees, rent/lease, uniforms, manuals, some utilities, liability insurance are probably deductible.

regarding the website, the irs differentiates between hobby and business. hobby expenses are not deductible, business expenses are. if you are not making an earnest effort to make money from the website, the expenses are considered personal or hobby expenses and cannot be deducted.

Can I expense a portion of my rent if I am spending hours everyday working on my website/business?

as a response to all the other posters- you can deduct anything you want, but the burden of proof is on the taxpayer when it comes to documenting those deductions and write offs. If you don't have experience with the IRS tax code my recommendation is pay a good accountant and stick to what you do best. The laws change every year and there are exceptions to every exception and what applies business to business in the same industries can vary- you're better off paying an accountant now than paying back taxes with added interest and penalties.

Hate to be "that guy" but get an accountant/CPA. They are worth their weight in gold (but never tell them that).

what a coincidence, i am an accountant

i feel another great networking opportunity for op487062 and zamochit. ill be watching this thread as I could always learn some more about business tax writeoffs