phogirl69

I got screwed for 04 because my expenses are way too low. The person who was doing my taxes told me that my expenses should be at least 5x of what i declared; she said that's usually the amount that people declare in my income who are self employed. I don't want to lie and overexaggerate, but I don't have enough things to write off.

The only thing I pay for is hosting, content is free. I don't use a separate office so I can't write that off.

I can't write off a phone, because I don't talk to any webmasters over the phone, I only talk to them via icq!! ( I only submit galleries basically). I can't write off a new car, because I work from home on the pc, I don't have any clients to meet or anything. I can't write off travel because I don't like to go to conventions.
Should I write it off when me and my boyfriend go out to eat?? lol Because that would probably ending up costing more than anything.But it would not be the truth though, because they are not business lunches/dinners...

I basically have barely like any expenses....

I wrote off pc parts that I bought for my pc, and a bunch of new monitors...
I have no employees so no one to pay.

I heard some people write off so much that it looks like they are losing money so they aren't.

So what the hell to write off?? Isp was actually free for me last yr so could not write that off either... Did not buy traffic so could not really write that off either. Basically I have almost no overhead and all profit.

The only other question I have is is there a difference between buying stuff to write off and using that money to the irs, besides the fact that I get to benefit from that money directly? Either way I have to spend the money, either in taxes or if not to purchase office supplies... Does the tax benefit
outweight the cost of buying all the office supplies?

My expenses were so low that I ended up having to pay more than average I think. It sucks so bad!

fünkmaster

... keep your shit offshore, pay no taxes ... everybody does it, even the FBI !!

Shaze

better to spend it on goodies and things to grow the business than to give it to the IRS

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WiredGuy

Well, there's quite a few ways you can make the things you wrote legitimate business expenses. And even though you probably filed already, you can still file an ammendment to get some money back. Here's a few suggestions based on what you said you couldn't claim...


You can still write off up to 50% of your rent as a home office. This should be no problem to justify.


Sure you can. Just because icq is your primary form of contact, you also need a phone. I talk all the time over icq/msn and get maybe 2-3 calls per month. You need a phone line in order to talk to people like your bank, your accountant, etc. This is a business expense. Again, 50% should be fine.

Doesn't matter. You go to the bank to make deposits, you go to your accountants office. You go to a mailbox, etc. etc. You need transportation to do this. I bought a company car brand new and wrote off 70% of it (keep detailed records of milage and at year end figure out what percentage was business and what was personal and expense the business portion). I was federally audited too (2 year long fight) and the government let me write that expense off no problem.

What kind of travel expenses do you have? Did you ever go to meet someone that was business related? Even if no money was transacted between the two parties, its still possible to expense it, like if you went to discuss with someone something that was work related that could benefit you, that's still an expense thats legit.


Hope this helps.
WG

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robfantasy

how much are u paying in taxes

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RRRED

Exact same thing happened to me for the same reason.. not enough expenses... I wasn't paying enough attention... My life was quite crazy the past few years so I got all behind and screwed up with them.

I have to pay more than my best friend made all year... It sucks... but what do you do? I realize it so I'm having to adjust some things and crunch a bit to catch up again.

WiredGuy

Also, it really really helps to consult your accountant throughout the year to make sure its not a shocker by year end. I meet my accountants at least once every 2 months to do this.

WG

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phogirl69

Thanks a lot for the detailed reply WiredGuy, that was very helpful. Basically it was my fault too because I waited until the very last minute (last filing day which is today actually) so I did not have time to do it the way I would have liked, plus a lot of the accountants were too busy already and wouldn't take me, so I went to a place that wasn't so good.

I am stupid, I should have written off the phone, I don't know why I didn't. I was just paranoid of the IRS and wanted to do everything exactly by the book, since honestly I don't call my accountant or bank very often. And I also want to get a new car in the near future so that will help if I can only write a small percentage off, and you are right; I do drive to the po box and the bank ALL the time.

I am glad I paid quarterly for this year, (2005). For last year I had to pay all at once because I did not pay quarterly and it's a big hit (for me, since I am not rich) to take all at once. So today I had to pay for last years, plus for this years first quarter.

Unfortunately I had no travel expenses at all for last year. For this year perhaps small ones for personal reasons but I can't say that I travel to meet anyone for business.

WiredGuy

You're welcome, and now that you have filed, you can file an ammendment at a later time (when tax season is not so busy) to get these expenses back. Just because you didn't do it on this return doesn't mean you can't. Talk to your accountant once tax season dies down a little bit and you can get those expenses back. Also, talk to your accountant, tell them you need more expenses and ask what they can think of, and you should be constantly thinking is this business related in any way. Even if its a very small percentage (like your phone line), you can expense it, just be reasonable with how much you write off. Hope this helps.

WG

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rickdog777

If I were you I would setup with a payroll company, that way they handle all your taxes. You won't have to worry about anything. The other thing you can do since you work out of your house is right that off. You can right off your interest you pay on your mortgage, also any money you contribute to an IRA is fully deductible and a deduction for Adjusted Gross Income. So if you don't spend all the money you make, you should look into an IRA, it's 100% deductible and you will not pay taxes.

phogirl69

Unfortunately I only live in an aparment right now, so can't write that off. I am definitely looking into IRA, I am in my mid tewnties and not getting younger, so gotta think about retirement. I heard that SEP or SERP's are bettr for self employed people though, I think, but either way I gotta look into that.

I have to file an amendment for sure. I just realized I forgot to write off domain renewals and designers I paid. Cannot believe I forgot that, that's what I get for being unorganized. So stupid of me.

BIGTYMER

15.3%...

chaze

marketing, always balance any left over expenses with Marketing!

Next give to a good cause, like alop.org (my site lol) charity will make you feel good so it has a benifit for you as well.

Or start your own non profit and donate to it.

jayeff

This is an extremely poor place to get advice about taxes: it is the nature of this board that you will get suggestions which could cost you far more in the long run than you are likely to save in the short term.

On the face of it, if your accountant is unable to provide you with the specifics that you are asking about here, you need another accountant. Maybe you are using a Main Street book-keeping/tax return shop: these and their like are not real accountants in this context. A real accountant will cost you more, but be able to tell you precisely what you can claim without sending up flags that might get you audited. He will tell you exactly what records to keep so that you will survive an audit intact if the worst happens.

But the key is the extra cost of professional services like these: a good tax accountant charges out at much the same rates as a lawyer. So you have to ask yourself whether the potential savings are likely to justify that kind of expense. It sounds unlikely that they will in your case.

If however, you are in this for the long haul and you are starting to make some serious money, a tax accountant can still earn his keep. Savings from claiming part of your telephone bill and the like are peanuts compared with the taxes you can legimately avoid by setting aside part of your income for a pension, health care and so on. This is an area which falls within the expertise of both tax accountants and financial consultants, but a good accountant is the best starting point. Try to find one who works for other self-employed professionals and medium-sized businesses in your area.

If that is not relevant to your situation, do a search on Amazon for "Taxes for Dummies". It will turn up several books (buy one for the current year) which will tell you all you need to know. Follow its advice, keep good records and don't be tempted to claim for anything you are not sure about. Then use an online filing service such as TurboTax and keep worrying about saving taxes for the day when you are earning enough money to make such concerns worthwhile.