Showing posts with label SALES. Show all posts
Showing posts with label SALES. Show all posts
Monday, October 25, 2010
Be damn sure you know what you're doing and why BEFORE you incorporate.
June --
I live in Columbia SC, I'm 68 years old and may never be able to retire but thankfully my health at this juncture is not an obstacle to working as a 100% commission salesman. Would you comment on a 1099 person incorporating as a business advantage and whether there is is any advantage to doing so in Wyoming or Nevada as websites in those states strongly suggest.
If there is a reference or a site that elaborates on this would you refer it to me.
John
Hi John,
I assume you are asking because of tax consideration not liability concerns. No matter in which state you incorporate the federal tax laws and regulations and requirements are the same.
States differ on laws and regulations and requirements. For instance, there may be no state tax, lower fees, and less oversight in some states.
Before considering incorporation you must first look at whether or not you are taking advantage of all the business expense and heath insurance deductions and pension contribution plans available to a sole proprietorship.
If you are taking full advantage of being an indie -- which, if you haven't read my book, Self-employed Tax Solutions, I assume you are not -- then you need to compare the cost of incorporation, the accountant fees for preparing corporate tax returns, the hassle and abundance of a more elaborate recordkeeping of finances as well as corporation activities against the amount of state taxes saved.
And, keep in mind: As states struggle in the current economy today's tax rates may not be tomorrow's rates.
If you are going to incorporate be damn sure you know what and why you are doing it. After you've spruced up your knowledge on indie taxes then read my posts on incorporating.
And a request of you and anyone else sending a question to me: Please send me the link or the source of your info.
Best,
June
Sunday, February 17, 2008
More about Business Auto Expense
Maybe it’s because gas prices are rising that I received a lot of questions about auto expense. I hope my responses here and elsewhere on my blog to the many questions about auto expense will help all you indies who use your car for business.
June,
I am considering taking a sales position. It would be outside sales. I would use my own car. They said that I could use my car as a write off. How do I look at this? If I put on 10,000 miles a year how much is it costing me to operate my vehicle and what do I get to deduct off my taxes if I make 40,000 a year?
Dave from Champlin, Mn
Hello June,
My name is Cesar, I am from Fairfield Ca. and been self-employed for the last 5 years as full time structure draftsman who works for a structural engineering firm.
My question is I have my client who's office is in San Francisco downtown and I travel to that office sometimes 5 days a week, but try to work from home at least 2 days when no rushes or deadlines occur, also work during the weekend as well.
Can I write off lunches I buy for myself?
Can I write off mileages and gas receipts? or one or the other on gas and miles? Also can I write off car insurance on one of my cars?
Dear June:
Your book Self-employed Tax Solutions has been an invaluable help.
Regarding auto mileage deductions, I make a bank deposit daily. I want to know if I can take a mile deduction for driving to the bank from my house on the way to work or if I should go to the bank on my way from work. I can do either I was just trying to do what ever would give me the biggest benefit.For 2008 I will have an in home office deduction thanks to reading your book. The room I lease at the Spa is too small for an office so I do all my calls, Bank deposit slips and paperwork at home.
Thanks for the Help Joyce San Antonio, TX
Kimberly from Columbus, OH
I’m having a problem trying to calculate my miles driven per day for the year to get more tax money can you please help me out?
You may deduct as a business expense the cost of going from one work location to another. It’s as simple as that.
If you don’t have a home office, then you may not deduct going from home to the bank or to your studio in town or to your client’s office. You may deduct the cost of going from the bank to your studio or to your client’s office.
Business auto expense can be figured in one of two ways.
The first, the standard mileage method, simply multiplies your total business miles by a per mile rate set by the government. The rate changes yearly . For 2007 the rate was 48.5 cents per mile. For 2008 the rate is 50.5 cents per mile.
The other, the actual expenses method, multiplies your total auto expenses by the percent of business use. If you put 20,000 miles on your car in 2007 and 5000 were for business use then your business portion is 25%.
Expenses for your car, include items such as:
· Gas & Oil
· Repairs & Maintenance
· Tires
· Insurance (Remember AAA or other road service coverage, too.)
· Registration & License
· Car wash
· Garage rental
· Loan interest
· Lease costs
Parking tickets, speeding tickets and fines are not deductible business expenses.
Added to the business portion of expenses is the amount for depreciation of the business portion of the cost of the auto.
A note to Cesar: Sorry, no lunch deductions. Take a look at my response On-the-road Meal Deductions to Kevin earlier today. You may deduct meals only when traveling. Check out the expenses -- meals and entertainment (8) category for a fuller explanation.
Check out my book Self-employed Tax Solutions. It will simplify your tax and financial life, and save you money!
June,
I am considering taking a sales position. It would be outside sales. I would use my own car. They said that I could use my car as a write off. How do I look at this? If I put on 10,000 miles a year how much is it costing me to operate my vehicle and what do I get to deduct off my taxes if I make 40,000 a year?
Dave from Champlin, Mn
Hello June,
My name is Cesar, I am from Fairfield Ca. and been self-employed for the last 5 years as full time structure draftsman who works for a structural engineering firm.
My question is I have my client who's office is in San Francisco downtown and I travel to that office sometimes 5 days a week, but try to work from home at least 2 days when no rushes or deadlines occur, also work during the weekend as well.
Can I write off lunches I buy for myself?
Can I write off mileages and gas receipts? or one or the other on gas and miles? Also can I write off car insurance on one of my cars?
Dear June:
Your book Self-employed Tax Solutions has been an invaluable help.
Regarding auto mileage deductions, I make a bank deposit daily. I want to know if I can take a mile deduction for driving to the bank from my house on the way to work or if I should go to the bank on my way from work. I can do either I was just trying to do what ever would give me the biggest benefit.For 2008 I will have an in home office deduction thanks to reading your book. The room I lease at the Spa is too small for an office so I do all my calls, Bank deposit slips and paperwork at home.
Thanks for the Help Joyce San Antonio, TX
Kimberly from Columbus, OH
I’m having a problem trying to calculate my miles driven per day for the year to get more tax money can you please help me out?
You may deduct as a business expense the cost of going from one work location to another. It’s as simple as that.
If you don’t have a home office, then you may not deduct going from home to the bank or to your studio in town or to your client’s office. You may deduct the cost of going from the bank to your studio or to your client’s office.
Business auto expense can be figured in one of two ways.
The first, the standard mileage method, simply multiplies your total business miles by a per mile rate set by the government. The rate changes yearly . For 2007 the rate was 48.5 cents per mile. For 2008 the rate is 50.5 cents per mile.
The other, the actual expenses method, multiplies your total auto expenses by the percent of business use. If you put 20,000 miles on your car in 2007 and 5000 were for business use then your business portion is 25%.
Expenses for your car, include items such as:
· Gas & Oil
· Repairs & Maintenance
· Tires
· Insurance (Remember AAA or other road service coverage, too.)
· Registration & License
· Car wash
· Garage rental
· Loan interest
· Lease costs
Parking tickets, speeding tickets and fines are not deductible business expenses.
Added to the business portion of expenses is the amount for depreciation of the business portion of the cost of the auto.
A note to Cesar: Sorry, no lunch deductions. Take a look at my response On-the-road Meal Deductions to Kevin earlier today. You may deduct meals only when traveling. Check out the expenses -- meals and entertainment (8) category for a fuller explanation.
Check out my book Self-employed Tax Solutions. It will simplify your tax and financial life, and save you money!
Thursday, December 20, 2007
Starting Out With a Loss
Hi June,
I just moved to Jacksonville, Florida coming from all over the country working as a PGA professional at private golf clubs. I worked as a club pro up into mid August and then I got engaged and became sales representative for golf apparel working from home.
I collected unemployment from mid august until late November.
I invested in a new vehicle, new clothing, new office equipment, work supplies etc.
I have received $100.00 dollars in commissions as of 12/18/2007. I have future commissions coming but I have no idea what I should do for tax purposes. Can I write off some of these expenses without really earning anything yet? Can I write them off in 2008? Can you help?
Thank you.
Dan in Jacksonville, FL
Hello Dan,
The quick answer: As long as you are in business trying to make money you may deduct business expenses even if you make no money.
The long answer: You need a lot of info. I see you requested a copy of my business expenses list. On the email that accompanied the list was a suggestion to read Is it a deductible business expense? on my website .
On this blog there is a lot of info about all kinds of expenses. Check out the category list on the left. You mention purchasing new clothes, so maybe a good place to start is the category expenses -- workclothes-uniforms-costumes .
And, congratulations on your engagement.
Happy Holidays!
June
I just moved to Jacksonville, Florida coming from all over the country working as a PGA professional at private golf clubs. I worked as a club pro up into mid August and then I got engaged and became sales representative for golf apparel working from home.
I collected unemployment from mid august until late November.
I invested in a new vehicle, new clothing, new office equipment, work supplies etc.
I have received $100.00 dollars in commissions as of 12/18/2007. I have future commissions coming but I have no idea what I should do for tax purposes. Can I write off some of these expenses without really earning anything yet? Can I write them off in 2008? Can you help?
Thank you.
Dan in Jacksonville, FL
Hello Dan,
The quick answer: As long as you are in business trying to make money you may deduct business expenses even if you make no money.
The long answer: You need a lot of info. I see you requested a copy of my business expenses list. On the email that accompanied the list was a suggestion to read Is it a deductible business expense? on my website .
On this blog there is a lot of info about all kinds of expenses. Check out the category list on the left. You mention purchasing new clothes, so maybe a good place to start is the category expenses -- workclothes-uniforms-costumes .
And, congratulations on your engagement.
Happy Holidays!
June
Sunday, November 4, 2007
SE Tax and Partnerships
Hi,
My husband currently receives a 1099 & is self-employed as a territorial sales rep.
He pays alot on self-employment [SE] tax. We are thinking about opening up a retail store in which we would be partners in an LLC.
Does The Small Business and Work Opportunity Tax Act of 2007 mean that we would not need to file for SE tax on this small business? If I am understanding it incorrectly & we still do need to file SE tax, is there some way we can combine his territorial sales rep work in which he already pays SE tax with the small retail business, so that we are not paying SE tax on two related businesses?
Also, does the Small Business and Work Opportunity Tax Act of 2007 eliminate the double taxation that occurs with husband & wife partnership llc's?
Thanks, Eileen
Hello Eileen,
Wow! You are mixing up apples, potatoes and Fruit Loops.
First of all, there is nothing in the Small Business and Work Opportunity Tax Act of 2007 that eliminates SE tax. To make sure there was no hidden paragraph that I missed I called the IRS to confirm. If you found something that says it's been eliminated, please send it to me.
Second: There is not now nor was there ever a double taxation of SE tax. Read What is Self-employment (SE) Tax? on this blog.
In a partnership SE tax is paid on the net profit. For instance, if you and a friend were 50/50 partners then each of you would pay SE tax on half the profit. A husband and wife partnership would also split the profit and pay SE tax on his and her share.
By the way, a partnership is the least tax advantageous business structure for a husband and wife business. A better way: One spouse as owner, the other as an employee.
Best,
June
My husband currently receives a 1099 & is self-employed as a territorial sales rep.
He pays alot on self-employment [SE] tax. We are thinking about opening up a retail store in which we would be partners in an LLC.
Does The Small Business and Work Opportunity Tax Act of 2007 mean that we would not need to file for SE tax on this small business? If I am understanding it incorrectly & we still do need to file SE tax, is there some way we can combine his territorial sales rep work in which he already pays SE tax with the small retail business, so that we are not paying SE tax on two related businesses?
Also, does the Small Business and Work Opportunity Tax Act of 2007 eliminate the double taxation that occurs with husband & wife partnership llc's?
Thanks, Eileen
Hello Eileen,
Wow! You are mixing up apples, potatoes and Fruit Loops.
First of all, there is nothing in the Small Business and Work Opportunity Tax Act of 2007 that eliminates SE tax. To make sure there was no hidden paragraph that I missed I called the IRS to confirm. If you found something that says it's been eliminated, please send it to me.
Second: There is not now nor was there ever a double taxation of SE tax. Read What is Self-employment (SE) Tax? on this blog.
In a partnership SE tax is paid on the net profit. For instance, if you and a friend were 50/50 partners then each of you would pay SE tax on half the profit. A husband and wife partnership would also split the profit and pay SE tax on his and her share.
By the way, a partnership is the least tax advantageous business structure for a husband and wife business. A better way: One spouse as owner, the other as an employee.
Best,
June
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