The Small Business Tax Help Blog

Archive for May, 2010

Question: Tax deductions for new part time home based business. Purchased Equipment last year. How do I calculate?

I have a small part time photography business. Last year I had $10,000 deposited into a business account to start my own business. I purchased some very expensive equipment. during 2006. However I did no paid work. On last years return I stated no income and no deductions for my sole proprietor portion of the return. This year things seem a little more favorable. I actually have a booking for a job and my business is now fully liscensed. How do i factor in my expensive purchases from a prior year? Any advice will be appreciated. Thank you
Sorry i meant i filed no deductions/income for the year 2005

Answer: You would capitalize your equipment and depreciate it over its useful life. Use its fair market value for depreciation purposes. Lets assume you bought equipment for $10,000 in 2006 used exclusively for business. The equipment has a useful life of 7 years. If you use an accelerated method of depreciation, you would write off the equipment over the next 7 years as follows:
2006 – $2,449 (24.49%)
2007 – $1,749 (17.49%)
2008 – $1,249 (12.49%)
2009 – $893 (8.93%)
2010 – $892 (8.92%)
2011 – $893 (8.93%)
2012 – $446 (4.46%)

If you had income in 2006, you would be able to elect Sec. 179 and expense the equipment in the same year. So if you had $15,000 net income in 2006, you would have been able to write-off the equipment of $10,000 and be left with a net income of $5,000.

Note that if you only used the equipment for 75% business use, you would only depreciate 75% of the cost of the equipment, or $7,500.

Democrats eye Medicare cuts in tax, jobs bill

Congressional Democrats considered tweaks on Wednesday to a package of spending and tax hikes, racing against a self-imposed weekend deadline to ensure passage before safety-net programs expire next week.

Home Business Tax Deductions (Home Office Deductions)

Coming up in the Chesters, Mendhams, Harding and Washington Twp.

THURSDAY, May 20 Artist Robert Heimall will be the speaker at the Chester Lions Club meeting at 7:30 at the Lamplighter Restaurant, Route 513. Heimall is noted for an uncommon perspective in both current and commercial images. He will discuss his involvement with Mission Emanuel, an ongoing Dominican Republic outreach ministry. For information, call Phil Savell at (908) 879-6543.

Senate Session 2010-04-14 (13:49:24-14:45:40)

Question: I need a small business expense tax question please help?

Hello,
Well currently I have 5 vending machines planning on getting about 20 more within this year.
As soon as I register them as a biz how much will I be taxed?

Is it true I can place business expenses and get them back in my tax return as long as I have proof?
Example: Gas to go fill the machines/Gas to go to Sams/ A laptop to keep them organized/ Cell phone bills to contact my machines locations? What about vending parts?

Is this really possible? To get my expenses back? Please let me know thanks if you can explain a little how this tax return will work again thanks

Answer: You will be taxed on the amount of “gross” income that you report. Certain expenses are allowable deductions for your business (i.e. purchase of equipment can be depreciated over several years, operating costs, etc.). You may very well show a loss, here again talk to a tax preparer (consultant).

You will need to set up a good accounting record of each, meaning: Equipment, phone, repairs, etc. I would recommend using a mileage log book to keep track of your actual miles that are driven “strictly” for your business. If your vehicle is used for business and personal use, this could be difficult to separate come tax time.

Keep receipts for everything! Depending on how successful and complex your business is/becomes you may want to consider having a tax preparer assist you.

I have nothing against accountants/CPA’s, just remember (if you decide to use one), they are there to keep your accounting records straight, they may not be up to speed on the tax laws. It is best to consult a tax preparer for tax related information.

Economists back mining tax

Prominent Australian economists come out in support of the mining super profit tax, saying it won’t hit the cost of living.

Omega Tax & Accounting – Accounting Robbins,IL 60427

Question: tax question about unreimbursed business expenses?

I have seven W2s for catering jobs with unreimbursed business expenses for each W2. I also have two 1099-misc forms with business expenses for catering. Do I combine all the expenses for, say, uniforms, for all the jobs and use one form 2106? Or do I use one form 2106 for each W2 job and for each 1099-misc with expenses? And what do I do about claiming mileage for these jobs?

Answer: You will claim the expenses for the w2 income on the 2106 and the expenses for the 1099misc on the schedule C.You will claim the mileage for the w2 wages on the 2106 and the mileage for the 1099 on the schedule c. If the uniforms were used for both. Calculate the percentage for each. Income from the w2 divided by total income and income from the 1099 divided by total income. This will give you a percentage.

Christine EA Master Tax Advisor

This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided.

Dismissal of case against Russ Jones stands

PHOENIX — A criminal case against an Arizona legislator is over now. The state Supreme Court has let stand the dismissal of felony charges against Republican Rep. Russ Jones of Yuma. The charges stemmed from alleged false statements on nominating petitions.

Why use an Umbrella Company if you are a contract worker?

Question: Using Single Member Llc EIN on W-9?

I have a Single Member LLC. I need to fill out W-9s and I would like to use the LLC’s EIN number. Is this correct? The form makes it sound like I should use my personal SSN, but the point of getting the EIN was to protect my personal SSN’s identity.

Answer: The point of getting an EIN for a single member LLC is to pay employment taxes for you employees (Employer Identification Number). The IRS considers a single member LLCs a “disregarded entity” which means you and the LLC are one in the same. They prefer your ss# goes on the W-9. However there are exceptions, when you filed for the EIN did you apply for it in your personal name – or the name you created for the LLC. If you applied for it in your personal name you may elect to use the EIN. This is called an Owners EIN. If you applied for it in the business name (ABC Contracting LLC for example) then you must use your ss#. Hope I explained that well enough for you.

Siemens Mobbing – Fortsetzung in den USA

Immer wieder werden Politiker, Bundespräsidenten oder Ministerpräsidenten um Hilfe gebeten. Meistens halte diese sich raus. Wegsehen ist angesagt, eimmischen nicht möglich. Eimmischen ist verboten.

SIA ZEIGT: JOJO MAYER LIVE IM SAM – 1/5 Ein Architekturvortrag der anderen Art!