I recently started a small business but won't be opening February 2015. I've been buying supplies and spending money on the shop...remodeling, plumping, floor etc. Can I add all these expenses to deducted?

12/16/2014 3:49:23 PM

is there an LLC / S-corp already?

12/16/2014 4:22:49 PM

My small business is an LLC.

12/16/2014 4:58:47 PM

is your fear that the IRS has a policy that it's not allowed for anyone to start a business late in the year that won't conduct a net positive transaction until the following year?

12/17/2014 9:30:16 AM

Thats not my fear or worry. I just want to know if I can add my current expense to my tax this year.

12/17/2014 11:45:49 AM

Is your question predominately one of timing or substance, with regard to the deductions? You seem to ask both, equally ambiguously.

12/17/2014 1:10:43 PM

Hurry up with my mother fucking 1099, old ass dude from Minnesota who I do contract work for!! Stop ice fishing and sit down with your accountant! I need to buy shit!

1/29/2015 9:53:57 AM

My yearly advice to everyone: get an accountant. It's good to have someone as a reference and who's job it is to keep up to date with the tax code.

1/29/2015 10:07:27 AM

Quote :

"I recently started a small business but won't be opening February 2015. I've been buying supplies and spending money on the shop...remodeling, plumping, floor etc. Can I add all these expenses to deducted?"

Yes you can deduct all those expenses. If it's a business you can deduct them all immediately. If it's a "hobby" you claim them now and carry forward the loss until you have income to deduct against. Just keep good records.

1/29/2015 10:36:00 AM

^^ Agreed; but, as an accountant, I am glad I can simply refer to myself and that I accept tacos as payment.

[Edited on January 29, 2015 at 10:36 AM. Reason : add another note]

1/29/2015 10:36:16 AM

Quote :

"My yearly advice to everyone: get an accountant. It's good to have someone as a reference and who's job it is to keep up to date with the tax code. "

Do online services miss tax code changes??

I'm going to get an accountant this coming year. My personal business is fairly easy to keep up with, but my wife just started a job where she works from home. I assume an accountant will be able to get us some pretty good "home office" deductions this year...correct?

1/29/2015 10:50:52 AM

Meh, I do mine myself. Short term cap gains, long term cap gains, mortgage, easy peasy

1/29/2015 10:52:55 AM

I'm just saying that doing it yourself with software, it can be easy to misinterpret what you are and are not illegible for.

The thing is if you pay turbo tax every year vs paying someone you might save some cash in the moment, but what is your time, energy, and anxiety worth. Plus if your accountant screws something up vs you screwing something up you're covered better there.

1/29/2015 11:07:17 AM

^

Meh...it goes both ways.

First...I think you have to be pretty dumb to misinterpret the Turbo Tax stuff. I don't know when the last time you looked at that stuff, but everything is put in an extremely simple way. Whenever there is a question, they have very helpful "Explain This" type links.

I've also had several friends have accountants fuck up and/or not file taxes in the past years come back to bite them in the ass recently. It all ended up getting settled, but not til I had to write a few threatening demand letters. I definitely don't worry about TurboTax not filing my shit...because I see it right away. After seeing my friends go through "mishaps"...I would probably be worried every year that my accountant didn't fuck up.

Even though I'll probably hire someone this coming year...I still think online tax services are the way to go if you don't have a lot of complicated stuff going on. If you have all of your tax forms, it probably takes a couple hours at the most. Or if you do it (like me) as you get forms in, it takes 5 minutes a day. Not a hassle at all, IMO.

1/29/2015 11:15:17 AM

yeah i tend to agree. If you don't have enough 'knowledge' to use turbotax, you're probably pretty ignorant of what's going on financially with you, which is a really bad place to be.

the most arduous part of doing taxes is just gathering up all of the documentation. which i'd have to do if i was taking it to a tax preparer. the couple of times i did that, all they did was enter data into software and spit out a tax return which they charged me a lot more than what turbotax costs.

so fuck that i can just as easily enter the data into the software-- and with a much better handle on what i'm doing financially, i feel it's more advantageous to do it myself.

EDIT: the home office deduction is an audit trap. you have to use the space 100% for business only. you can only deduct the square footage of the space used solely for that work. the savings is pretty tiny, and the increased audit risk just doesn't seem worth it. my $0.02

[Edited on January 30, 2015 at 12:45 AM. Reason : . ]

1/30/2015 12:42:14 AM

There are plenty of other deductions that affect tax liability much greater than a home office - is the juice really worth the squeeze on that? I have changed my tune on it over the years

1/30/2015 1:17:29 AM

taxes - the one thing where it's my responsibility to figure out what i "owe" and i can be screwed if i get it wrong

1/30/2015 7:50:32 AM

Yeah let me ask you guys a question, because I pay my own tuition it gave me 1,000 for the AIC. It says you can get up to 2,500 (how the hell if I pay almost 30K in tuition am I at 1,000?) what do you have to do to get the full 2,500?!

1/30/2015 9:39:48 AM

Quote :

"the couple of times i did that, all they did was enter data into software and spit out a tax return which they charged me a lot more than what turbotax costs."

If all you do is hand the paperwork in and walk out then I can understand this mindset. I try to sit down and talk with my guy at least once a year to get some general financial info and advice on whatever has been going on recently. He'll ask questions and provide suggestions and things and try to get an idea of what's going on outside of the pure numbers and these consultations don't cost me anything outside of the expense of my taxes.

Anyway to each their own. For me I get some peace of mind about it and feel like I do get some education out of the process. Obviously there are good ones and bad ones out there and everyone has a different experience.

1/30/2015 9:54:39 AM

Quote :

"is the juice really worth the squeeze on that? I have changed my tune on it over the years"

Yeah, this past year is the first year I can technically claim it, but I'm not sure I'll even bother.

1/30/2015 10:04:26 AM

oh - i meant from the other side - is it worth it for the IRS

1/30/2015 10:09:30 AM

Ah. Do you do use the deduction?

1/30/2015 11:16:32 AM

when i was working from home a significant amount at my last job i did - i haven't at my current job

1/30/2015 12:00:28 PM

Quote :

"EDIT: the home office deduction is an audit trap. you have to use the space 100% for business only. you can only deduct the square footage of the space used solely for that work. the savings is pretty tiny, and the increased audit risk just doesn't seem worth it. my $0.02"

Do they really give a shit for people who are working from home and getting paid $40 - $60k a year? I mean...unless you are trying to get $20k in deductions, I don't see the IRS auditing a bunch of middle income people for a couple hundred bucks (kind of what OmarBadu said).

My wife's "office" is in the guest bedroom, which is only used 5 or 6 times a year. It also probably takes up 1/6 of our house. I would imagine we could get a pretty good home office deduction out of that. Her friends that work for the same company have smaller home offices (and bigger houses) than we do and said it makes a difference.

Any CPAs want to chime in?

1/30/2015 1:05:44 PM

This is my first year using it 100%. I doubt you'd get audited. The reason why I haven't done it before is b/c the square footage is like 150 sqr feet max. Don't you have to also do some other crap when you sell if you use the home office deduction?

1/30/2015 2:17:57 PM

All these questions are probably reason(s) why we should hire an accountant....

1/30/2015 2:45:09 PM

Psh, I'll do some googling and save a few hundred bucks for a few minutes of work

1/30/2015 3:29:13 PM

Tax Situation/Question:

I loaned some money to a friend a few year's back so he could start his own business. This year he paid me back in full (a little over $5,000 was his final payment). If I made any money on interest on the loan...it was minimal (it had been so long since his last payment that we forgot how much he owed and just guesstimated a little over the final amount). But I just got an email about a 1099 he's sending me for it.

Getting taxed on a repayment for a personal loan makes zero sense to me. I sent him an email and he should be getting back to me later today...just want to make sure I have all my ducks in a row before we talk. Internet research isn't providing a lot right now.

2/2/2015 11:31:27 AM

It may or it may not be counted as income.

The fact that you don't know, and the fact that it actually might be are a pretty clear indicator that our current tax system is fucked (as if we didn't all already realize this.) beyond the point of saving.

2/2/2015 11:38:56 AM

^ I feel like that's a little extreme, but I feel ya.

Should add that the 1099 was for the full final payment. I wouldn't mind paying taxes on any interest income I made. But I can't imagine I would have to pay taxes on money that I loaned someone and then got back.

2/2/2015 11:54:12 AM

the loan itself is only taxable if you claimed it as a deduction when you initially paid it (bringing it full circle). otherwise, only the interest is taxable.

2/2/2015 12:00:13 PM

what's the story on inheritance/estate/gift/whatever it is tax?

Say my grandmother left me a large (5 figure) some of money.

2/2/2015 1:15:57 PM

You pay zero taxes.

2/2/2015 1:20:27 PM

Quote :

"But I just got an email about a 1099 he's sending me for it."

Beware. He's sending you a 1099 because he plans to deduct the whole payment amount from his income, including prinicipal, which he isn't allowed to do. When you get the 1099, the IRS is going to want you to pay tax on it.

2/2/2015 3:12:30 PM

I've already talked to his accountant and now have a written confirmation that the 1099 has been rescinded. Problem averted.

2/2/2015 3:24:22 PM

2014 E-file details

Federal Return
Received by TurboTaxFriday, January 30th 2015 4:59 PM EST
Received by IRSFriday, January 30th 2015 4:59 PM EST
Filing status changed to: AcceptedFriday, January 30th 2015 6:00 PM ESTNorth Carolina Return
Received by TurboTaxFriday, January 30th 2015 4:59 PM EST
Received by North CarolinaFriday, January 30th 2015 6:03 PM EST
Filing status changed to: AcceptedFriday, January 30th 2015 10:49 PM EST
Back
2013 E-file details

Federal Return
Received by TurboTaxWednesday, February 5th 2014 8:50 PM EST
Received by IRSWednesday, February 5th 2014 8:51 PM EST
Filing status changed to: AcceptedWednesday, February 5th 2014 9:01 PM ESTNorth Carolina Return
Received by TurboTaxWednesday, February 5th 2014 8:50 PM EST
Received by North CarolinaWednesday, February 5th 2014 9:03 PM EST
Filing status changed to: Accepted

2/3/2015 4:31:36 PM

got a scenario I need help with:

Throughout the past year I've been doing some design work for a friend of mine who owns a construction company. I've done about $2600 worth of work during the course of the year, all paid to me by check. I never filled out a W-9 or any other tax forms for him. Is he required to send me a 1099 form for this work?

I'm planning on putting down my earnings while filing this year, but don't know exactly how it will be credited towards his company without a W-9 form on file...

2/4/2015 8:44:11 AM

Got to love getting taxed for not having health insurance for 5 months.

2/4/2015 12:28:10 PM

Ex employer sent me a w2 for $1.62

2/4/2015 1:29:45 PM

I work from home and make 100% of my income 1099. Been using Turbotax online but a friend recently suggested I'd be better off finding a professional to do my taxes.

Is there really that much of a difference?

2/4/2015 1:55:19 PM

probably depends on how thorough you are on the deductions you are currently taking

2/4/2015 1:56:56 PM

See I'm thinking I'm not as thorough as I thought I was.

But I don't know who I need to go see, b/c I've never had my taxes 'done' by another human being.

Can anyone recommend someone in the RDU area they've used or prefer?

2/5/2015 9:27:06 AM

Quote :

" EDIT: the home office deduction is an audit trap. you have to use the space 100% for business only. you can only deduct the square footage of the space used solely for that work. the savings is pretty tiny, and the increased audit risk just doesn't seem worth it. my $0.02"

I've used the home office deduction for a decade without an audit, although I keep an entire apartment in a separate state for doing business out of. I only claim utilities though, since the rent is paid by the company.

In a few months I will be permanently relocated, so no more home office deduction after that.

2/5/2015 10:23:04 AM

Motherfucker, I'm a FL resident, so no state income tax, but it just occurred to me that I'm gonna have to start paying state income tax due to my new job being across the border in Alabama.

5%. Fuck me.

2/5/2015 11:30:36 AM

still waiting on 1 w2.

2/5/2015 12:48:09 PM

Still waiting on my k1

2/5/2015 5:19:07 PM

http://money.cnn.com/2015/02/06/news/companies/turbotax/index.html?iid=Lead

Quote :

"The popular TurboTax software has temporarily stopped processing state tax refund filings in all states after reports of fraud increased."

2/6/2015 3:28:04 PM

^My dad sent me that news link literally right after I submitted my return on TT yesterday. Thankfully both the state and fed returns were accepted without issue last night (I'm in NC BTW, one of the states that hadnt reported an issue with it yet).

2/7/2015 8:09:06 AM

Quote :

"My wife's "office" is in the guest bedroom, which is only used 5 or 6 times a year. It also probably takes up 1/6 of our house. I would imagine we could get a pretty good home office deduction out of that. Her friends that work for the same company have smaller home offices (and bigger houses) than we do and said it makes a difference."

My wife is a CPA and we also do this. An aside we just discovered related to that: if you order delivery food to your home office it is 100% deductible unlike the usual 50% for business meals.

2/7/2015 10:38:49 AM

Filed this morning. $350 back from both Feds and SC

2/7/2015 2:05:16 PM