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Thread: Taxes

  1. #1
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    Taxes

    How do you go about reporting income? Do you pay quarterly and what do you decide to pay? Do you log the miles of each job or use an app?

    Having some hard times getting together for taxes. Had a CPA year 1 we exchanged detail or tax services. Didnít log anything the 2nd year and didnít bother claiming anything on my end.

    This year Iíve been taking notes on mileage, income, and have almost all my expenses in order.

    Do you use turbo tax or some kind of program or do you hand it off to a CPA?

  2. #2
    Senior Member sudsmobile's Avatar
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    Re: Taxes

    The same CPA that does my personal taxes will be handling our business taxes. We set up as a general partnership. If you're a Corp, I believe you have to pay quarterly.

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    Senior Member LSNAutoDetailing's Avatar
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    Re: Taxes

    ^^^ what he said ^^^

    You should be tracking everything, you can use turbo tax small business and create general simple categories. You'll want to separate business expenses by:
    Expenses ---> regular product purchases
    Reusable Expenses "Assets" --> although I believe the new tax code allows for 100% deduction in year 1 instead of depreciating assets.
    If working out of your house work with an accountant to figure out % of house sq footage and % of utilities
    If your driving to and from clients, track your mileage.

    Like I said, Turbo tax can get everything for you with reports so you can just hand your accountant the report outputs or in some format they like.

    CPA's know the tax law, loop holes and what is and isn't allowed... I do not. That's why I use an accountant.

    Paul_G www.lsnautodetail.com IDA CD-SV

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    Senior Member WindyCity's Avatar
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    Taxes

    It depends how your business is structured, this is sole proprietorship or a corporation?

    Thereís a big difference between those two because for example a sole proprietorship is easy to file business income and expenses at the end of the year with your personal taxes where as a corporation requires quarterly

    I never track my mileage I just guesstimate it.

    Other than that you should have a separate business checking account which all deposits and withdrawals come out of making your taxes pretty straightforward until you hire an employee then itís a whole different game

    Sent from my iPhone using Tapatalk
    David

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    Re: Taxes

    Quote Originally Posted by WindyCity View Post
    It depends how your business is structured, this is sole proprietorship or a corporation?

    I never track my mileage I just guesstimate it.

    Sent from my iPhone using Tapatalk
    Careful here, if you get audited, it can come back and bite you with a requirement to reverse all the mileage deductions along with penalties and fees.

    Same for what others said, if you are just doing this as a side business and are an SP, it is much easier than if you are a C-Corp, LLC, LLP, etc.

    FYI - anyone generating more than $1,000 a year in tax liability is 'REQUIRED' by law to file quarterly income tax payments. You must pay estimated tax for 2018 if both of the following apply.
    1. You expect to owe at least $1,000 in tax for 2018, after subtracting your withholding and refundable credits.
    2. You expect your withholding and refundable credits to be less than the smaller of:
    a. 90% of the tax to be shown on your 2018 tax return,
    or
    b. 100% of the tax shown on your 2017 tax return.

    --------

    For what it's worth, I am a licensed and practicing Certified Public Accountant in the state of Tennessee. (lic# 25061).

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  8. #6
    Senior Member LSNAutoDetailing's Avatar
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    Re: Taxes

    Quote Originally Posted by usshelena725 View Post
    Careful here, if you get audited, it can come back and bite you with a requirement to reverse all the mileage deductions along with penalties and fees.

    Same for what others said, if you are just doing this as a side business and are an SP, it is much easier than if you are a C-Corp, LLC, LLP, etc.

    FYI - anyone generating more than $1,000 a year in tax liability is 'REQUIRED' by law to file quarterly income tax payments. You must pay estimated tax for 2018 if both of the following apply.
    1. You expect to owe at least $1,000 in tax for 2018, after subtracting your withholding and refundable credits.
    2. You expect your withholding and refundable credits to be less than the smaller of:
    a. 90% of the tax to be shown on your 2018 tax return,
    or
    b. 100% of the tax shown on your 2017 tax return.

    --------

    For what it's worth, I am a licensed and practicing Certified Public Accountant in the state of Tennessee. (lic# 25061).

    Not to hijack the thread, so you're saying quarterly filings are required for 2018? Is it also true for 2018 we don't need to separate assets from regular supplies due to the 100% full deduction on assets vs. three year depreciation?

    Doing thing the right way (separate accounts), tracking expenses, all allow you to take legitimate deductions.

    Paul_G www.lsnautodetail.com IDA CD-SV

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    Re: Taxes

    Quote Originally Posted by LSNAutoDetailing View Post
    Not to hijack the thread, so you're saying quarterly filings are required for 2018? Is it also true for 2018 we don't need to separate assets from regular supplies due to the 100% full deduction on assets vs. three year depreciation?

    Doing thing the right way (separate accounts), tracking expenses, all allow you to take legitimate deductions.
    Filing quarterly estimates is best practice for any business, regardless of requirements, and is also the practice best aligned with US GAAP as it best follows the matching principle.

    Filing quarterly estimates is required if a business meets the guidelines I noted above, which is most businesses including SP's.

    If you are putting all of your assets and expenses into a section 179 expense for this year, then you wouldn't have to bifurcate out items you plan on capitalizing, since they are all being expensed anyway and there is no depreciation that you will need to calculate via MACRS (modified accelerated cost recovery system).

    Best practice, however, is to still track your depreciable assets, since you never know when the tax laws can change, whether or not you have depreciation options available to you at the SALT (state and local tax) level, or if you change your mind and decide to capitalize something later on.

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  11. #8
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    Re: Taxes

    Funny how I have been lurking here forever on how to best polish and keep my cars looking tip top, and the first posts I make relate to my employment. (sigh).

  12. #9
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    Re: Taxes

    Quote Originally Posted by usshelena725 View Post
    Funny how I have been lurking here forever on how to best polish and keep my cars looking tip top, and the first posts I make relate to my employment. (sigh).
    When you have an area of expertise, it's great that you share it. One of my early posts was explaining some of the differences that exist in different color paints because I work for a company that makes pigment dispersion and some paint, including automotive paint.

    I appreciated that you offered your expertise.

  13. #10
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    Re: Taxes

    Quote Originally Posted by mk9750 View Post
    When you have an area of expertise, it's great that you share it. One of my early posts was explaining some of the differences that exist in different color paints because I work for a company that makes pigment dispersion and some paint, including automotive paint.

    I appreciated that you offered your expertise.
    Yeah, I wasn't really complaining - was just laughing that I didn't post till something related to accounting in a detail forum, lol. I am truly the epitome of a CPA, haha.

    But yes, I understand the benefits of offering advice - and appreciate all those who do.

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