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taxes, what do you do?
To the members in the USA who do business taxes.
Not how you track finances, but what type of service do you use to do your taxes?
This is my first time doing business taxes. So do you use Turbo Tax Business Suit, H&R Business, do you have a tax professional you go to in person, etc?
Any and all tips/suggestions would be much appreciated.
Much thanks,
Chris
Not how you track finances, but what type of service do you use to do your taxes?
This is my first time doing business taxes. So do you use Turbo Tax Business Suit, H&R Business, do you have a tax professional you go to in person, etc?
Any and all tips/suggestions would be much appreciated.
Much thanks,
Chris
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One of my favorite topics to talk about. Aside from LEGO I have been preparing taxes for the past 3 years.
As this is your first year, I would seek a professionals help. Any H&R block should be able to help out or a small local firm should be able to handle it. A few things you'll want to have ready:
-Information for all revenues
-Information on all expensess broken out by category (cost of goods sold, shipping, office supplies ectt)
-Detail on any capital purchases (storage units or equipment related to your operation) generally these are depreciated over the MACRS life of the asset, but the person doing your taxes should be able to claim section 179 (type of expense) on them for you.
-Any detail on rent/power/internet and a percentage breakout of how much space is used at your house for your LEGO operation (home office/business deduction)
Potential forms that will be used, Schedule C, Schedule SE, Form 4562, and Form 8829.
Please let me know if you have any other questions, hope this helps!
Kyle
Brian
@KyleJohnson11 you hit the mark. I am taking a double finance class this coming semester at my college. I have spoke to my soon to be teacher very briefly, he too suggested me to see a professional. I thought he might just be saying that because he is not only a teacher, but he works with local small businesses and does their taxes. I will see if I can talk to him more when classes start up. If I have any issues with my taxes or my soon to be teachers methods, I will be sure to talk to you.
Much appreciated,
Chris
Brian
I was a hobby, then as of October 2013 became an actual business, tax ID's and etc. Thanks to PayPal I have most of my finance information as a hobby (but not all), and of course have all receipts and such when I became a business. I wonder how I record the information on my taxes when I was only a hobby? Things such as money made/lost on shipping. Do I only report on my business taxes what I did Starting Oct 1st or do I tally it everything up? Then when it comes to shipping, I charge a little more than postage, this is to cover envelop and packaging materials and all things related to shipping. If I look at what people paid for shipping, and what I actually paid to ship it, it looks like I made money, but I really didn't when I factor in supplies of the materials.
I do know my teacher said I count everything I paid for my inventory, even when I was a hobby store because this will bring down my income which means I pay less.
I will probably just go see a tax professional. Taxes in general have always confused me (thank you for the help TurboTax!). I hope these finance classes I am going to take help me understand terms and business finances better and how they relate to taxes. Financial Accounting and Managerial Accounting are the classes I will be taking.
wow this is a long post....
Sorry!
Chris
And honestly, if you made less than $1000 profit in 2013, it's probably not worth filing. But you will pay self-employment taxes at $400 (or technically $432.29). You will also pay income tax on any profit of $5 or more. Your bill? A whopping dollar. I profited $10 last year. I'm not bothering filing taxes to pay my $1. So report me. Honestly, that $10 gets lost and makes no difference with the rest of my real income anyway.
*this is candid personal experiential information only. this is not professional tax information. seek professional tax help and make your own stupid decisions for yourself. at $1000 profit you will pay $85 in self-employment tax and $96 in income tax. this assumes you made no other money and had no other deductions or credits.
*since I mentioned Ebates, here's my referral link: http://www.ebates.com/rf.do?referrerid=uCGQ2WdJaZgUHBRjPw1TqQ==
I always use a tax service - usually Jackson Hewitt, I was surprised at how much I could deduct that I didn't know about. Subscriptions, vehicle milage/depreciation, computor and other office equipment, the room in your house (home office), the list goes on…
You have to file anyway for regular employment medical etc, so it will likely be more complex than you think.
I attempted using Turbo Tax one year and ended up "owing" a lot - decided to seek a Tax professional and ended up getting a check instead.
Mind you our taxes seem to always be complicated.
This is our first year back in US after several years - before we left we were "allowed" to claim for hobbies too, and at that time you could show a loss for the first years.
The last reason is if you make a mistake you have a slight buffer between you and the IRS, do it yourself and "they" decide you filed a fraudulent return - no-one to help you, with one of the tax preparers they will assist (at least used to).
I have always found that I save more than their fees by hiring a professional
Graham