Fucking Taxes

For instance, he talked about a bigger house so I can entertain "clients". Dude - I don't even HAVE clients. Do I? I don't sell anything, and I'm not officially affiliated with any of the companies whose products I'm actually promoting!
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Clients and potential clients can be applied very liberally. Any networks you are working with or may potentially work with (though they should be paying for you). Anyone that you happen to mention your services to that could "potentially" use them. Courting potential employees or independent contractors who you may purchase services from. The list goes on and on... as long as you aren't writing expensive meals and/ or bar tabs off on a daily basis you can comfortably write off most dinners out.

My car, gas, insurance, a portion of my mortgage, electric bill, etc are all paid with pre-tax dollars. It's surprising how fast this stuff adds up over the course of a year.
 


Airin said:
My car, gas, insurance, a portion of my mortgage, electric bill, etc are all paid with pre-tax dollars. It's surprising how fast this stuff adds up over the course of a year.
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Unless you have multiple cars there's no way you will get away with deducting your entire car/gas/insurance payments for long. You are only allowed to deduct a portion based on how much you use it for business vs. personal, which if you stick within reason really doesn't add up to much.

There are at least a few problems with claiming a home office deduction. 1) Your risk of audit goes WAAAAAY up 2) You need to accurately calculate the correct basis and figure the depreciable portion of your home, etc. etc. which almost no one does. If you get audited in the future you'll get screwed if you're not doing this. This also comes into play when you sell your home and lose some of the "benefits" you enjoyed.

These things are fine and dandy when starting out, but once you're making any significant amount of money they don't add up to much.
 
Stop having people report against you, and report only what people report against you. Thats what I do.


efeezy said:
Yeah. My CPA just emailed me a review copy of my return to check out. I nearly spit coffee all over my monitors. Oh well, fuck it. It's only money I guess. And I wouldn't owe it if I hadn't made it. I think now is the time to convert my LLC into and S-corp. Time to get my shit together and make even more money so I can give it all to the man.
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Berto said:
Will do. I JUST picked up this book:
Amazon.com: 422 Tax Deductions 2010 Edition (For Businesses & Self Employed Individuals) (422 Tax Deductions for Businesses & Self-Employed Individuals) (9780917510311): Bernard Kamoroff C.P.A.: Books

Reading it while my car gets fixed (2011 deduction woot woot), and I must say I'm very impressed so far.




Seriously. It seems like real estate is where to go - there is a cutoff point where tax-wise, it makes sense to buy over rent. I think it was around $3k, but I'll let you know tomorrow night.

But I don't think my tax attorney really understands my situation from our first meeting. I mean, once you get the SEO game rolling, you can make some SERIOUS profits without having to expense much or own assets. My empire not where yours is, but it's getting there.

For instance, he talked about a bigger house so I can entertain "clients". Dude - I don't even HAVE clients. Do I? I don't sell anything, and I'm not officially affiliated with any of the companies whose products I'm actually promoting!

I have a lot of questions still unanswered. For instance:
- ANYONE can technically be a "customer" of my website. But they aren't buying from me - they're buying from whoever I'm affiliated with. So if they're users of my sites (some of my friends are), can I expense stuff with them or do I need to do more official business activities with them?

- If I have a website about XYZ, can I write off anything that has to do with XYZ? Like my HangoverCures website... can I write off alcohol expenses? :)

- Nearly all of my expenses are SEO service related, which I assume will go in the "Advertising" category*. PayPal is often used. Do I need to send DFB a 1099?? I spend more than $600 with them, as do all of us using them... do I send PayPal forms? What about writers who do contract work? They're not employees, and I don't even send them a check. I do PayPal or Odesk. How the hell does that get reported?

Crap like that I really need to figure out. I have like 20 other questions still not understood.

Nervously excited for this meeting tomorrow.

* (I don't think category matters a whole lot, but you don't want too many things in Misc/Entertainment or else that could trigger alarms)
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I'd be interested in knowing what you find out about how to report shit like paypal transactions, etc.
 
Dresden14 said:
Stop having people report against you, and report only what people report against you. Thats what I do.
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I'm not gonna pay unnecessary $ to support billions spent in foreign wars and to support welfare, unnecessary food stamps, the cost of prisons and cops for foreign threats from the south to America.

Ive been doing what Ive been doing for 9 years, so.. No ones gonna go poke around my bank accounts.
 
Da Capo said:
Regarding Odesk, these are all independent contractors so you don't have to fill out any forms. Same with Paypal, as long as they aren't W-2 employees. But obviously double check with your guy.
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This is false. If you spend over $600 with any independent contractor you are required to fill out a 1099 and report their earnings. Most CPA's will require you to file a 1099 just to take the write off. Good luck explaining to the IRS that you paid someone thousands of dollars, took the write off and didn't report their earnings...

Da Capo said:
My accountant keeps telling me to buy property as well since the tax benefits are enormous. But to live in the desirable places around here you have to pay out of your nose. You don't have to pay city taxes where your at right? Maybe we just invest in a nice beach house out your way lol
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Personally I own a home here in Southern California and I don't see the tax savings as being huge. I mean you can write off the interest on your mortgage but at the same time you get hit with a $5k property tax bill every year and this number will probably only go up in the future. Kinda surprised that a CPA gave you and Berto that advice...

I own two S-Corps and would agree that they're a great structure for tax savings. Basically the main advantage is that you have to take a reasonable paycheck (which payroll taxes will be deducted out of and here in LA it's about 33%) and the rest of your profits you can take as a bonus and those profits you wont have to pay medi-care and social security tax on which is a savings of about 15%.

Feez (and other Californians) - We should probably trade notes.
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Agree 100%

btw what are you guys paying to have your taxes filed for your s-corps?

Just paid $650 a pop for mine...

And my experience with most CPA's is that they won't give you much advice on how to "reduce your tax burden." Unfortunately it's up to us to figure out how to do that and than make suggestions to them which really irritates me...
 
Your best bet is to move to a state that has low taxes; TX, NV, FL are good states with low or no state income tax. Personally imo, I'd only report what is reported against you. Again, it doesnt make sense to pay $ to support a country that's F'ing its self.
 
Move from Southern California to TX, NV or FL just to save on taxes?! #LOSING

FYI property taxes in TX are 2-3 times what they are in CA so depending on how much you make and how much house you buy, you might benefit little or nothing financially moving to TX.
 
My info might be dated but the only states with no personal income tax are:
Florida, South Dakota, Texas, Washington, Wyoming, Alaska and Nevada

No Sales Tax ( for buying that plane or car ):
Delaware, New Hampshire, Oregon, Alaska and Montana

No Corp Income Tax:
Nevada, Washington, Wyoming, Texas ( does have a franchise tax ), and South Dakota

Best combo:
Set up s-corp or LLC in No Corp Income Tax state, buy your cars, boats, planes in the no sales tax states, and then live in a no personal income tax state.
 
^^ the above best choices seem to be having a company and living in:

Neveda, Washington, Wyoming, and South Dakota...
 
eliquid said:
buy your cars, boats, planes in the no sales tax states
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Doesn't work like this; usually vehicles are taxed in your state of residence. SC has a $250 cap on sales tax, and Georgia is much higher, but GA residents can't come here and take advantage of our rate, GA dings them.
 
papajohn56 said:
Doesn't work like this; usually vehicles are taxed in your state of residence. SC has a $250 cap on sales tax, and Georgia is much higher, but GA residents can't come here and take advantage of our rate, GA dings them.
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I know a couple guys that buy their planes in Montana ( no tax ) and their cars in the neighboring state to me, Indiana ( lower then Kentucky ).

Guess I should have included these guys buy thru their Montana LLC
 
papajohn56 said:
Doesn't work like this; usually vehicles are taxed in your state of residence. SC has a $250 cap on sales tax, and Georgia is much higher, but GA residents can't come here and take advantage of our rate, GA dings them.
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Also, couldnt this work more if say, you bought it as a business vech. and your business was in the same state?
 
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