US TAx reminder for self employed

[Stone]

If your self employed this is the last year you can buy a veichel and write it off of your taxes up to 83% and the wieght has to be over 6,000 lbs must be done by Dec 31st. (I've told this to a thousand people today and fuigured I'd tell you guys)

So merika open a business and go buy a Hummer! :redrod:

[Duke]

You can write vehicles off on your taxes, lucky?

[Merika]

Wow....I didn't realize it was that high. I know some people run mock small business' out of their house to be able to take off the 1/3 of their mortgage and other bills. I could see where buying a car under a sole proprietorship would be the way to go.

I think all you have to do is get a business license and a tax number. I'm surprised more people don't do it.

[Star]

Originally Posted by Duke

You can write vehicles off on your taxes, lucky?

of course you can duke...only if you're self-employed. When we had our construction business we wrote everything off from the car & truck, gas, tools, office supplies, household bills (because we ran the business from our home), phone bills, insurance and even dog food and vet bills. The list goes on and on. You don't get the whole amount that you spent written off but a percentage of it.

That sucks that the states can't write those off anymore after the 31st. That only makes it harder for anyone to be self-employed. Keeping a business above water is hard enough. now they're making it even harder.

[Merika]

Stoneheather,
I thought you meant the 31st as in the last day for taxes THIS YEAR. Did you mean that it will no longer be a tax deduction at all? I didn't even catch that until I read Star's post and went back to read yours.

[Stone]

this is the last year the IRS will be letting us take the whole 83% next year 2005 filing in 2006 the deduction will decrease by almost 1/2.

All you really need to do is get online and file a corporation for $85.00 your business could be a simple as dog walking, or babysitting.. all you need is enough income and deductions to take a loss.

[Merika]

Even taking off 40% is quite the deduction. Is that based on the whole value of the car or on what you have paid thus far in downpayment and installments?

[Stone]

The whole value but the next year you have to file a depreication..

[Duke]

Sorry, I missed the self employed part. I read it as if you could deduct your car for no reason at all :oops:

[Merika]

WISHFUL thinking Duke! Even though....as SH pointed out....it's easy to create a home business which doesn't really require much of your time. I wonder if running a group of forums count? You should check into the tax laws there and find out if you have some deductions coming your way. Every dollar counts.

I have a friend who does the ebay thing....and he takes all his deductions for running a business out of his home.

Thanks SH for posting all that information. It's great to know. As tax time gets closer.....I hope you post more which can help the people on here.

I HATE those depreciation schedules...it's the only part of a long form I just can't deal with!

[Duke]

I will be checking into it prior to accepting any kind of site related revenue. In Canada you can get a business license for just about anything, write off expenses such as rent, auto, dining out, etc., within reason. You don't even have to show a profit, just a reasonable plan that one day includes profit. I think you're able to operate in the red for 3 years if I'm not mistaken.

[Star]

we paid 75.00 for our business licence. whether you're in the red or not, the taxes still need to be paid and they are high! once you make 30,000.00 in one year then you have to start charging and paying g.s.t. on top of the other taxes. It's really hard to keep up on paying the taxes. By the time you pay it all, you hardly have anything left. And if you don't get the revenue that you're expecting to get, you're screwed. Which is why we don't have a business anymore. Contractors decided to not pay and disapear so we're left with the high tax bills to pay. Not worth it.

[Merika]

We are going to have those new tax breaks for those who make more than $200,000 per year.....but that's because generally those are the business people who end up providing jobs. I'm not sure what the ramifications are if you make less than that. I suspect many just show their business in the red for as much and as long as possible.

I wouldn't think you'd have to create revenue.....just suggest it's in the future to be considered a business. As Star said though....your taxing structure may be different than ours.

[Star]

I never did my taxes so I have no idea as to what the percentage of your earnings is that you have to pay the government. I know that you pay 7% for the G.S.T. but the other one for taxes I have no clue about. We got accountants to do our taxes. Safer that way when you have a business. The accountant lets you know what you can and can't right off. I still don't do my own taxes. I get my sis-in-law to do them for me (she's an accountant). I have no interest in doing taxes. I do miss having to use accpac and doing payroll though. Maybe we'll start up a new business in the future. Next time we'll be smarter and incorporate or make our business limited so it doesn't affect us personally like this one did. We have no choice now but to bankrupt everything because of the business venture. There really isn't much we, as business owners of a construction company can do if contractors won't pay. and it's 100's of thousands of dollars!!

[Merika]

There used to be a time when you could do your own more complicated tax returns here...but now they change the laws every year and they are impossible to keep up with.

I do a longer version of the EZ forms we have without any trouble and file for myself. Most people don't though. We have that fast tax return where you can borrow on the return and get it almost immediately. It's not too expensive and most people do want their money right away.

Does Cananda have a type of 'Earned Income Credit' ? I get quite a bit of cash from that each year.....around $4000 which is FABULOUS!