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Posted by y2esinc@gmail.com on September 16, 2008, 1:34 pm
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On Sep 16, 11:11=A0am, "Paul Thomas, CPA"
>
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> > 1) I have a full time job as a computer system administrator
> > 2) Rent a 2 bedroom apartment in NY
> > 3) Consulting part time (20-60 hours/month) as a computer system
> > administrator. =A0Majority of the work is remote but once in a while I
> > might go into the office
> > 4) Own a laptop, desktop, printer (previous personal now for
> > consultancy), home phone service (previous personal now for
> > consultancy), cell phone (previous personal now for consultancy),
> > internet connection (previous personal now for consultancy
> > 5) Setup a very small business area in my bedroom (1/4 of the bedroom)
> > 6) S corp was registered in Delaware
> > 7) Setup a business checking account
> > 8) Setup a business credit card for all expenses
>
> > What tax write can I take legally? =A0I am just tired of shady
> > accountants.
>
> Good tone to set while asking questions in an - accounting - newsgroup.
>
> > Things I am hearing about which need further explanation.
>
> > 1) I have to subscribe to 2 home phone lines (personal and business).
> > Mitigating circumstances - I don't really use the home phone for
> > personal. =A0Very rarely.
>
> The IRS and Congress have decided that you probably would have a phone at
> home even if you didn't have a business. =A0The result - your first line =
is
> personal in nature and no expense for that line can be taken except for
> actual business related long distance calls.
>
> > 2) I have to count my personal and business minutes on my cell phone
> > each month. =A0This is annoying since most of the calls are for
> > business.
>
> Yes, you have to allocate the bill based on usage. =A0Averages might work=
out,
> but the auditor will count minutes used.
> Congress knows how the cell phone game is played, so does the IRS. =A0Don=
't
> take all of your cell phone expense as business unless it IS all business=
.
>
> Which means - having a separate line for personal calls - either a land l=
ine
> or cell number.
>
> > 3) Cable modem. =A0Is this a 100% write off?
>
> Not if you use any of it for personal use. =A0And really, will anyone bel=
ieve
> that you don't surf for fun? =A0Take persaonal e-mail? =A0Just take some =
portion
> of it and be happy.
>
> > 4) Is 1/4 of 1 bedroom a write off? =A0Any caveats like "primary" sourc=
e
> > of business, etc?
>
> Maybe possibly. =A0But you generally can't take an "office in the home"
> expense under an "S" corporation structure.
>
> You could have the company reimburse you for it's expenses.
>
> > 5) How do I deal with previously owned laptop, desktop, etc? =A0Are
> > these write offs?
>
> You can book them as assets, based on their actual values, as of the time
> you converted them to business use. =A0Any personal use should be account=
ed
> for and depreciation (expensing) taken over time.
>
> > 6) When do I have to pay my taxes?
>
> It depends. =A0Annually or quarterly, maybe monthly or weekly. =A0It depe=
nds on
> how much profit you generate, if you are making payroll to yourself from =
the
> business, what amounts of payroll withholding you have from that payroll,
> what your withholding is from your regular job's salary, and a host of ot=
her
> factors.
>
> > 7) I gave a gift of $500 to a colleague at the company I am consulting
> > for. =A0This was not a bribe, but just something I wanted to do b/c him
> > and I get along with him very well. =A0I sent this from the new founded
> > business checking account. =A0Is this bad? =A0Is this a tax write off? =
=A0Do
> > I need a receipt from him?
>
> Yeah, well, gifts are limited to $25, so that's the extent of your busine=
ss
> deduction.
>
> > 8) Do I only pay taxes every March? =A0This is what I am hearing from a=
n
> > accountant
>
> The corporate return due date is March 15th. =A0You can extend that to
> September 15th if you like.
>
> An "S" corporation doesn't owe taxes at the federal level. =A0Your state =
may
> impose some type of tax at the corporate level, either an income tax or a=
n
> excise tax, or a net worth tax, or......
>
> Check with a local tax advisor.
>
> > 9) Anyone know a CPA who can help who is not very expensive? =A0I am no=
t
> > making enough money to warrant a very expensive CPA.
>
> Remember that you often get what you pay for. =A0And remember that some t=
imes
> you don't get what you pay for.
>
> Find someone in your community that you feel comfortable with. =A0Their s=
tyle,
> office location, fees, etc, all play a role in who you chose. =A0Ask your
> friends, associates, suppliers, and other business contacts for a referal=
.
>
> > 10) If I buy some clothes that I use once in a while for the
> > consultant job, is this a 100% write off?
>
> Only clothing that is a uniform, and/or for safety purposes allowed as a
> deduction. =A0Generally clothing that is "steet adaptable" is considered =
as
> personal in nature and not a business deduction.
>
> So, have shirts embroidered with your corporate logo, or screened with th=
e
> company name, and you're talking a deduction. =A0Buying a suit from the s=
tore
> isn't going to cut it.
>
> > 11) If I donate to charity from my business CC, is this a 100% write
> > off?
>
> Nope. =A0At least not at the "S" corporate level. =A0Donations are passed
> through to you and taken on your Schedule A as a charitable contribution.
>
> Now, see if you can turn that "donation" into advertising in some manner.=
=A0I
> "donate" to the local school sports program, but I get an ad in the footb=
all
> program or a banner hanging on the outfield fence, or my business name
> called out during a time-out on the court.
>
> How you do all of the above should be ironed out with your accountant, ev=
en
> if you don't like what they tell you.
>
> --
> Paul A. Thomas, CPA
> Watkinsville, Georgia- Hide quoted text -
>
> - Show quoted text -
1) I am going to average out to 400 mins usage a month, b/c it is too
hard to know what exactly I am using. I am underestimating.
If the IRS comes to my house, then I will tell them that I need hire a
person to figure out how much mins I use.
3) Cable modem. Is this a 100% write off?
So, I take off a percentage for business and a percentage for
personal?
4) Is 1/4 of 1 bedroom a write off? Any caveats like "primary"
source
of business, etc?
You could have the company reimburse you for it's expenses.
Do you mean that MY CORPORATION can pay myself (on a personal) for a
few hundred dollars a month?
This this a 100% business expense? About $200-$300 a month based on
square footage.
5) How do I deal with previously owned laptop, desktop, etc? Are
these write offs?
You can book them as assets, based on their actual values, as of the
time
you converted them to business use. Any personal use should be
accounted
for and depreciation (expensing) taken over time.
How do I legally account for personal use?
7) I gave a gift of $500 to a colleague at the company I am
consulting
for. This was not a bribe, but just something I wanted to do b/c him
and I get along with him very well. I sent this from the new founded
business checking account. Is this bad? Is this a tax write off?
Do
I need a receipt from him?
I figure I will be taxed for $475 now?
8) What is a "owner withdrawal?"
Something like taking out money from the business account for some
personal use. I will have to be taxed on this correct?
9) What is the main use of deductions? What benefit is this to me?
I figure, that I work hard, make money, give money to the government,
they use my money to expense fancy cars and other personal things, and
life goes on.
The best I can get out of a business deduction is a business meal, and
some growth of my business. Correct me if I am wrong?
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