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Tax Tips For Small Folks? 350

Posted by timothy from the last-minute-pleading dept.
An anonymous "The tax deadline is fast approaching (here in the USofA). Like some of you, I have a small business on the side. Since I haven't figured out the 'step 2' yet (the one before 'step 3: profit!!!'), my revenues were zero for all of last year, and the expenses were just about zero too. What is the quickest and least painful way for a person in my situation to do his taxes? I don't want to spend 100s of dollars going to a paid professional, just to have him put all zeroes in the form. If you have done your taxes and are a small business (C-corp, don't ask why...), do you have any tips?" This is also your chance to offer all the heretofore unsolicited tax advice you've been bottling up all year.
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Tax Tips For Small Folks? More

Tax Tips For Small Folks?

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  • Get an Accountant (Score:5, Informative)

    by inbox ( 310337 ) on Saturday April 12, 2003 @05:11PM (#5717673)
    My advice (and I, too, am the President of a very small C-Corp not quite yet generating a great deal of revenue) would have to be to get an accountant. There isn't just one form to put zeros on. There are a lot. And all kinds of other things. And penalties for messing it up.

    Skip the lawyers if you have to, but don't skip the accountant.

    • Re:Get an Accountant (Score:4, Informative)

      by dr_dank ( 472072 ) on Saturday April 12, 2003 @05:23PM (#5717752) Homepage Journal
      I work as an accountant for a large payroll firm and most of my job is to weed out clients that are not running payrolls and are getting free nil filing on our tax filing service, generating cost with no return. If you're using a payroll service, don't expect them to file for you if you are not active.

      The parent comments advice is probably the most important advice you'll get on this thread.

    • Re:Get an Accountant (Score:5, Informative)

      by kerskine ( 46804 ) on Saturday April 12, 2003 @05:27PM (#5717767) Journal
      Great idea - especially since you've missed the deadline for filing corporate taxes - March 31. You're going to need some professional advise at this point.

      • Re:Get an Accountant (Score:3, Insightful)

        by jhunsake ( 81920 )
        They don't care for small incomes. I've filed for friends and a couple corporations with relatively small incomes many times late. They will send you a statement with penalties on it (which aren't that much given the small income), but if you send in what you would have owed had you filed on time, they will drop the rest off your account.

        Tip: Learn how to play the system. Don't let the big IRS beuracracy hurt you, make it help you.

    • Re:Get an Accountant (Score:3, Informative)

      by scrotch ( 605605 )
      I worked as an S-Corp for two years, and I whole-heartedly agree: get an accountant.

      The IRS will give you incorrect information. Their forms, and booklets, and other books (and tax software) on the market all assume that you know what you must declare and what you can write off. Can you write off paper clips? Can you write off your phone bill? Gasoline? Last year's taxes? They won't tell you. If you're not absolutely-bet-your-business-on-it positive, get an accountant. Mine charged about $200.00 to do my b
    • Just follow one simple rule this year: don't take more money as distributions than as salary.

      It sounds like you didn't have much revenue, and you had net income of around zero, so don't worry about it. They won't spend half a second on your return. And in the highly unlikely chance they do, any penalties are a percent of what you should have paid. n% of ~$0 = ~$0.
    • There's no good way around it. Get all of your stuff done right now, because surely, you don't plan on being a zero-revenue company forever. And when the time comes for employees, you might as well have a good working relationship with an accountant so he/she can be sure to get your things in line... payroll taxes, estimated taxes, etc.

      For a simple company having your books and taxes done should be around a few hundred bucks.

      And as for skipping the lawyers.. here here.

  • Hmm (Score:3, Funny)

    by rzbx ( 236929 ) <slashdot@@@rzbx...org> on Saturday April 12, 2003 @05:13PM (#5717684) Homepage
    Sell drugs. Its risky, but supposedly the profits are great. The best thing is you don't have to worry about taxes, just skip them altogether. You'll be out of luck if they decide to legalize and tax it though. Jail time, risk of getting shot, etc. are all bad things as well. Then again, stick to whatever your doing. Sorry I can't help with your taxes.

    • Re:Hmm (Score:4, Funny)

      by Lionel Hutts ( 65507 ) on Saturday April 12, 2003 @05:35PM (#5717805) Journal
      Interestingly enough, drug dealers are the only people in the world who the U.S. tax system does not give a deduction for ordinary business expenses. (There is legislative history, though, that this is not meant to disallow the subtraction of cost of goods sold.) If you're in the murder-for-hire business, make sure you don't also deal drugs, or you run the risk the IRS will think your bullets are for defense of your drug territory and disallow your deduction for them.

    • LKF (Score:2)

      by geekoid ( 135745 )
      actualkly, you are obligated, by law, to pay taxes on all income.
      The IRS does not report how you got that money.
      According to a former top official of the IRS, it would be both against reulations, and quite frankly, not practical to turn that info over to the Feds.
      The IRS want to collect your money, they do not care how you get it.
      If they can't [rove you got 1,000,000 dollars through an illegal axctivity,even if they know it, the feds will report that info to the IRS. Then you go to jail for tax evasion.

  • Tax Tips For Small Folks? (Score:5, Funny)

    by TC (WC) ( 459050 ) on Saturday April 12, 2003 @05:13PM (#5717686) Journal
    Looking at the headline, my first though was "Wow, what special tax needs do midgets have?"

  • Jeopardy (Score:5, Funny)

    by Future Linux-Guru ( 34181 ) on Saturday April 12, 2003 @05:14PM (#5717694)
    I have no revenue

    The question, Alex Trebek, is:

    "Who is RedHat?"
  • .. the pros at Enron.. negative earnings!

  • complexity in US taxes (Score:4, Interesting)

    by Submarine ( 12319 ) on Saturday April 12, 2003 @05:17PM (#5717713) Homepage
    I must say I've never been able to understand how the American public can put up with the convoluted US tax system. I'm not talking of people with small businesses on the side, but of ordinary folks who have a salary, some investments, maybe rent a room from their house, and have to pay a professional tax account to fill in their tax return!

    Also, doesn't the IRS provide information on how to fill the forms? (For instance, the French tax services have email addresses you can send tax queries to, and they do answer.)
    • IM not kidding. REporters have called up the irs with the exact same question and gotten completely opposite answers. THis way, if the governemt want to get you nailed for taxes, they can always do it. YEah, im paranoid, but im also not making this up.
    • It's not a complicated as people makeit seem.
      And all the information you can possible need is available from the IRS.
      Plus you can buy software that will tell you what you need. If I was the original poster, I'd probably get the software.
    • The reason we're forced to put up with our insane tax laws is because the people who write them are allowed to pay outside firms to do their taxes for them.
      I'm convinced that if members of our congress were required to prepare their own taxes, the tax forms would consist of "In 2002, you made $X from all sources of income. Please send a check for $Y to:...."

      And we'd still have audits...

  • RTFTM (Score:4, Informative)

    by sheemwaza ( 570202 ) on Saturday April 12, 2003 @05:20PM (#5717730) Homepage Journal
    When the IRS sends you the forms, they come inside a large book which explains line by line how to do your taxes. I suggest reading the pages explaining the Schedule C, which covers a personally owned business. If you made zero dollars, that could be good news because any business expenses become tax deductible. Unfortunately, if you don't turn a profit in three years, the IRS considers your business a hobby and will make you pay back taxes on your deductions... Also, the Publication 17 is a great tax reference. All available online or at your local library...

    • Re:RTFTM (Score:5, Informative)

      by joshtimmons ( 241649 ) on Saturday April 12, 2003 @05:43PM (#5717858) Homepage
      You obviously don't have a C corporation. The Schedule C is for sole proprietorships. A corp C is much different and as far as I know, there is no fine manual (FM). Every year, our accountant generates a stack of forms about an inch thick for our corporation C taxes, then gives us about 10 more pages to go with our 1040. We don't use schedule C at all.

      That said, this person (with no sales or revenue to speak of) should not have incorporated yet. He should have been a sole prop or LLC. Then he could use the schedule C and he would reasonably have been able to do it himself. IMHO, there's no need to own a corporation unless you are making enough for it to be worth the bother.

      Gotta love the tax system! No, really, you gotta!

    • Re:RTFTM (Score:5, Informative)

      by Lionel Hutts ( 65507 ) on Saturday April 12, 2003 @05:53PM (#5717901) Journal
      How does this post deceive us? Let me count the ways.

      1. Schedule C, and the rest of Form 1040, are for individuals only. A C corporation will be filing Form 1120. The Service does provide publications "explaining" this form, but we are talking about a lot more complexity.

      2. The individual cannot deduct the corporation's business expenses. The corporation just wouldn't owe any taxes, and could (potentially) carry the net operating loss forward to future years, but the losses of a C corporation cannot reduce its shareholders' taxes.

      3. It's not 3 consecutive years, it's 3 years out of 5 (except that it's 2 out of 7 in the case of certain horse-related businesses).

      4. It's not up to the IRS. The Code uses this as a presumption only. It is always a question of fact: if an individual has an honest subjective intent to make a profit at an activity, the expenses are deductible; if not, they are not (with many exceptions, as usual).

      5. None of that matters, since it's the corporation's taxes. You can't possibly reduce your taxes by forming a corporation to pay the costs of your hobby. Deductions would be disallowed if, hypothetically, the corporation did not have a profit motive, but a bigger worry would be the almost certain constructive dividend treatment of payment of the shareholder's expenses. But the deduction is worthless to a corporation with no income anyway.
  • You don't need to incorporate. I know, I did it, once. You can easily get a checking account as a DBA (doing business as) to keep things seperate from your "regular" account. If you have a corporation, then you have to start dealing with things like paying unemployment insurance, and filling out forms saying you're an equal oppurtunity employer, etc... it's a pain the ass, and not worth it.

    So again, dump the corporation and use a Sched C. Put 0's on it, it's pretty easy to do.

    If you CAN'T close the corp,
    • Ah, more (probably) bad tax advice from Out There.

      Yes, forming a corporation is (in many cases) a bad idea. But that's not where our hero is: he already has one, and it is already doing something (if not much). Liquidating the corporation will mean that the corporation will owe taxes on the difference between the fair market value of its assets and their basis, and the shareholder will owe taxes on the difference between that amount and his basis in his stock. Even if nothing has increased in value sinc
    • This advice is not precisely true. There are plenty of good reasons to use an LLC, S-Corp or C-Corp. You should either talk to an accountant about it, or read some books yourself before you make that decision.

      For example, with a C corp, you can deduct 100% of your health insurance expenses. Depending on where you live, this can be huge (here in Massachusetts, as a single 23 year old male, mine are about $420 a month for BCBS PPO plan - just imagine with a family... ugh). And an S Corp can be useful be

      • If you want to avoid employment taxes, don't bother with an S corporation, where you risk having dividends recharacterized as salary. You want a limited partnership, in which you, as limited partner, receive 100% of profits after a fixed amount to the general partner (which could be a corporation you own). The Code specifies that, in the case of limited partners, payments other than guaranteed payments are not subject to employment tax. (It doesn't define "limited partners," but being one under substanti

  • Are you even on the IRS's Radar? Is it a hobby? (Score:5, Interesting)

    by shoppa ( 464619 ) on Saturday April 12, 2003 @05:22PM (#5717744)
    Are you even on the IRS's Radar? i.e. did any businesses send you 1099's at the end of the year? Did you send out any 1099's?


    There is a level of activity below which the IRS will classify your attempt at a business as a "hobby". Having negative income is a prerequisite for this classification. See the IRS publication 535 for details.

    • Unless I'm missing some huge loophole, it's not a hobby if he told the IRS (and countless other local and state agencies) that he wanted to create a C-Corp, regardless of revenue, which is what should have happened when he created the corporation (all kinds of paper work needs to be filed like articles of incorporation, etc...).

      There are all kinds of fees, dues and taxes that get paid out to multiple groups (IRS, state department of labor, city government, etc....) at various times during the year just by
  • Once this has been answered, howsabout some tax tips for us taller folks????
  • I know that many don't like HR Block, because it is expensive, the people are ill-informed, etc. I went there one year out of desparation and was pleasently surprised. ~120 bucks for all of my taxes, completely prepared by the accountant, took about 45 minutes, and they dealt with things that, frankly, I can't like consulting income, deducting home business expenses, student loan interest, etc. Might be a nice middle of the road solution for those who don't need to overpay an accountant, but even the onl
    • My wife has done taxes for H&R Block seasonally for the past eight years, so I know something of what I say here. If your tax situation is at all funky, when you go to H&R Block, ask to see an experienced preparer.

      The vast majority of Block workers only work for them during tax season (January 1 - April 15), and the vast majority of them have been with the company two years or less. The tax code isn't like programming - it's internally inconsistent, because of the patch-it-and-try-again way it ge

  • Tips (Score:5, Informative)

    by namespan ( 225296 ) <namespan@el3.1415926itemail.org minus pi> on Saturday April 12, 2003 @05:24PM (#5717756) Journal
    1. Call the IRS help line. The first two years that I did contracting work, calling them and asking questions probably added $500 to my return. They were friendly and helpful -- more so than in many interactions I've had with private corps who you'd think would have a greater incentive to keep the customer satisfied. This year I haven't had such great luck talking to them, though. Wonder if that congressional inquiry is wearing off. But you might try calling and asking them for advice.
    2. Tax software. Two years ago I used Turbo Tax for the first time, and it was worthwhile. While I'm glad I slugged through the paper forms and publications for a while so I could understand some things, the software takes a fair bit of the tedium out of things. Some preparers I'm aware of out there seem to simply use tax software to do the lions share of the work.
    3. If you find yourself tangled up even with these helps, it's time to talk to a pro. Use and consider retaining the services of an accountant and/or tax lawyer.
    4. File for an Extension. You're already close to the wire... give yourself more time. If you're sure you own money, make a payment. You can get a refund on it later, and won't have to pay interest and fees on the outstanding balance.

    • Tax software (Score:3, Insightful)

      by swb ( 14022 )
      A friend of mine is a lawyer who also attended post-law school tax school (grad school for lawyers?).

      He swears by tax programs for ordinary people's taxes and says they generally do a good job, although there are places where hand-tuning can help.

      The analogy he made was programming -- tax software is like a high level language. It's great for most stuff, although there are places where hand-tuned assembly can help, and some places where its necessary.

      • I would have to agree. I used the Turbo Tax online software this year and it was a breeze. My situation isn't complicated(1 job, student loans, some interest income/stocks) and having TT fill out all the forms and then electronically file was simple.

        For most people some software will do everything they need.
  • Tax Tips For Small Folks?

    Arrrg, what a dillema. Make a wisecrack about Mini Me filing a Mini "Return"(can he deduct the very non-mini 17" Powerbook?), or make a wisecrack along the lines of 'leave the size of my banana out of it'?

    Oh wait, problem solved :-)

  • I am asuming you got yourself a tax ID number and are getting notices about filing taxes. I too have a corp, I was planning to do great things. Opps, someone stupid got put in charge of the US economy. Just like with his father the economy when to #%@(!

    I don't bother to file even though they send out notices. They used to send them out every three months now they send it out once a year. If your business isn't doing any economic activity it's not going to owe anything. Think of if just like when you where

    • I'm with you... As simple as it sounds, the law says you do not have to file if you do not owe a tax.

      Take that advice and run with it.

      • Right, you don't have to file, if you don't owe anything. However if the IRS owes you, then you have to file to get your money back.

        I'ave always felt that taxes should be due, in cash on election day. (Not a poll tax, even if you decide not to vote you still have to pay, to avoid crooks I suppose a check will have to do, but with substantial penilties for bounded checks) But few people actually save money, so this is seen as unworkable. (I personall belive that after a couple times of going to jail f

  • And I thought... (Score:5, Insightful)

    by the-banker ( 169258 ) on Saturday April 12, 2003 @05:29PM (#5717781)
    And I thought the people that sought legal advice on Slashdot were nuts...

    Asking for tax advice on here is taking it to another level...

    • Re:And I thought... (Score:5, Funny)

      by Alsee ( 515537 ) on Saturday April 12, 2003 @08:50PM (#5718667) Homepage
      And I thought the people that sought legal advice on Slashdot were nuts...
      Asking for tax advice on here is taking it to another level...

      I have this little lump on my leg, under the skin. It doesn't really hurt or anything, but it feels sort of wierd. It's been there for a few months now. It's bigger than a pea, maybe the size of 2 or 3 peas. It isn't really hard, but it's not really soft either, I guess it's sort of firm-ish.

      I was wondering if I should have surgery to have it removed? Is it some sort of tumor? Could it be cancer? Or is it just a harmless bump that will go away? I'd post a photo of it, but my server can't take a slashdotting.

      -
  • Find a good tax preparer -- someone you trust who knows what they are doing. Such a person is worth the money.

    I work with a guy who loves to prepare taxes, he's saved me lots of $$$ and has been an excellent source of financial advice. I get my hundred dollars worth, that's for sure.

  • You must have SOME deductibles. (Score:5, Informative)

    by SlashChick ( 544252 ) <erica@e[ ]a.biz ['ric' in gap]> on Saturday April 12, 2003 @05:37PM (#5717819) Homepage Journal
    I run a small business as well, and though it didn't make an incredible amount last year, I had a lot of startup expenses. If you say you don't have any business expenses, you aren't looking hard enough.

    • Did you perform upgrades to your computer? Is your computer used by you for business purposes? Write the upgrades off! Last year, I wrote off a bunch of stuff, including an Adobe Photoshop 7.0 upgrade, a RAM upgrade, and several other things. I already have a hard drive upgrade to write off for this year.
    • Did you purchase books to better your business knowledge? Deduct them! O'Reilly books count too!
    • Did you travel to a client site? That's 36 cents per mile in your pocket, bud. I travel to client sites 4-5 times a week, so I deduct several thousand miles a year.
    • Did you purchase servers? A router or switch? How about a printer or a scanner? Those are all business expenses.
    • How about your phone bill? DSL or cable modem? Cell phone? If you use them for business, these are all deductible.
    • Did you take a client out to eat or send a client a gift? That's tax-deductible too.
    • Did you donate to the EFF or even to Goodwill? Deduct it!


    This is why you go to an accountant -- because it's never jut a bunch of zeroes. If your business didn't make much money and you didn't either, you're entitled to a refund. Spend the $50 or so to talk to a real person about your business, and take the time to document gas mileage, computer purchases, and monthly bills you can write off. In fact, if you have a room in your house that serves as an office (and only as an office), you can write off a percentage of your rent or mortgage every single month.

    If you didn't know this stuff, it's certainly time to take your money and go straight to a tax preparer. My dad's assistant does tax returns for a living, so I always get her to do mine... but if you don't have a relative who can do them, go find someone who can! A good accountant is invaluable and will teach you the tricks of tax deductions (some of which I have outlined above.) Never underestimate how much money a professional can save you in the long run.
    • But with zero revenue deductions are not that usefull.
      • ...unless of course you actually plan on making money in the coming years. Those deductions can be rolled forward (not sure how many years) and applied in years when you actually do have a net income. I have deductions from two years ago that will benefit me on last year's taxes; I finally managed to make a non-negligible amount of money last year, and it's nice to carry forward those startup expenses to offset it.
    • you can only right off the percentage that is used for your business.
      If you are an accountant, you can't write off the space on your hard drive used for games.
      If you are using thing that arn't part of your business, you are in for a hewap of trouble. he IRS doesn't audit for one year, it goes way back.

      Of course, if you are a computer consultant, whop is to dsay you won't need to know the gaming industry?

  • Go Pro (Score:3, Insightful)

    by l33t-gu3lph1t3 ( 567059 ) <arch_angel16@NOspAM.hotmail.com> on Saturday April 12, 2003 @05:38PM (#5717831) Homepage
    There is a reason why accountants are highly paid professionals. Find one that is trustworthy (family/friends are helpful here) and then use them.
  • Get the 1040, and if you have capital gains a Schedule D, from the IRS web site, print it out, follow the easy-to-use directions, and mail it off. Should take less than an hour to do the whole thing.
  • Firstly, if you gruesomely eviscerate your victims for religious purposes (instead of just on a whim) you can be a religion. You need at least three accomplices, if I recall correctly, to serve as treasurer and suchnot. If they complain on "principled" grounds about your savage murders of children, point out the tax benefits this accrues for them. This tactic works best on MBAs.

    Secondly, remember to keep the children alive in cages for months in your basement. This way, you can claim them as dependents. AL
    • * This is an actual tax loophole. If your primary business is selling insurance policies to farmers, and you meet some other requirements, you don't have to pay federal taxes. Recently this loophole has been heavily abused, but I can't find the reference. Anyone?

      I assume you are talking about section 501(c)(17) [cornell.edu]. But it's not only for insurance sold to farmers, it's for all very small (<$350,000 premiums/year) nonlife insurance companies.

      There are many other farm-specific tax breaks, of course.

  • Resources (Score:2, Informative)

    by randLews_Therin ( 545739 )
    I would suggest visiting the National Society of Enrolled Agents [naea.org] which has references to local society's in all fifty states and tax professionals there in. Alot of these society's have professionals who almost strictly deal with small business returns and would probably be willing to give you a free consultation. The Colorado society of Enrolled Agents [taxpro.org] site may also be useful, which on the left hand bar has a couple of other useful tax site links.
  • Tax Tips For Small Folks?

    "Little people" (let's be politically correct, why don't we we) are subject to the same tax trails and tribulations as the rest of us. No more -- no less. Let's not act as though they are any less human.


    blakespot

  • It's possible to file a 'zero return' with both the state and feds (check with your state tax laws). Depending on your state it's possible to file both online. You can file a zero return when there is no profit made, or when your expenses exceed your income. It should be fairly inexpensive to have a CPA prepare a zero return. It's still possible to do it on your own though. It usully requires filling out only one or two forms, sticking zeros in just about every line. My state's web site has a great section

  • You're too late... (Score:5, Interesting)

    by gregm ( 61553 ) on Saturday April 12, 2003 @05:59PM (#5717927)
    The deadline for C-Corps was March 31. IANAA but I am the IT guy at a CPA firm and I must say they do know their stuff and are worth every penny. You should get an accountant for at least the first few years... later on when you understand what has to be filed and how they should look you might be ok doing it yourself. Same with sales tax payroll etc... none of it is all that difficult unless you've got bookoo bucks and need to find the loopholes.

    There aren't many loopholes (probably none) that will be able to be used for the common person or small business. H&R Block, your bank etc. are not the way to go, BTW. Go to a CPA firm, heck you'd have a better chance getting decent work done at Fred's Accounting than at any of the fly-by we do taxes only places. Your bank and regular tax places have one lowly person sitting in the office for 9 months out of the year... when tax season hits they get temps, college kids studying accounting and anyone else they can find to crank out taxes. Most accounting firms are fully staffed all year with competent people and they might hire a temp or two to help out with the phones or do filing etc.

    Not filing and not filing on time will get you massive penalties so don't screw around, call a CPA right after April 15. Ask the CPA if any penalties you might have already incurred will outweigh the value of your corp. You may be able to abandon the corp and just start over.

    While I'm on the subject.... the urban myth says if you have an inc., you're personal stuff is protected, Incorporating doesn't do squat for your personal risk until it is able to establish it's own credit rating, many years down the road. No bank will lend a newly formed, poor corp. any money without a personal guarantee the loan will be paid off.... i.e. your house as collateral. There are other disadvantages like paying tax on your inventory etc that make a C-corp less attractive, especially at the start.

    Of course I could be wrong about everything.

    G
  • Well, OK...you've waited this late to ask a question like this, so, no answer is going to be a panacea, but take a look at TurboTax Web [intuit.com]. My wife and I used them this year, and in years past. (Though not last year...) There are a number of options as to how much help you want (which translates into how much money you're willing to spend), but I think it's worth it for someone in a small business (my wife teaches Jazzercise, so she's a Schedule C).

    Plus, you don't spend a penny unless you print or file.

    Turb

  • do your employees know (Score:5, Interesting)

    by jd142 ( 129673 ) on Saturday April 12, 2003 @06:09PM (#5717987) Homepage
    That you are asking for tax advice on Slashdot because you are too cheap to get a decent accountant? If I found out the business I was working for or doing business with was getting its advice from the chowderheads here, I would be out the door so fast Einstein would spin in his grave.

    The only good advice you'll see on this board is to fork over the money and do it right: get an accountant.

    Yeah, I know this is a snarky comment, but please, this question begged for it.

  • how doy you know your expenses are at $0? (Score:3, Informative)

    by patmoore ( 628216 ) on Saturday April 12, 2003 @06:13PM (#5718008)
    If you have a legimate business (i.e. you are intending to make a profit at some point and you put in a significant amount of hours (>100) a year) there is a whole raft of stuff you can take off the tax bill. Phone calls, internet usage, depreciation on your computer, mileage, etc. Spend the money and find an accountant who will take the time to educate you on the basics of what you need to know. Don't skimp but you should get be able to get the information you need for about $500. (which by the way can be deducted.) My wife is an accountant and she is really the one to answer this -but you should get the idea.
  • if(!overhead && !profit)
    you_have_a_business==FALSE;

  • In the UK (Score:2, Informative)

    by aking137 ( 266199 )
    You said you were in the USA, so this is of no help to you, but could be for others in the UK.

    Over here, as just about everybody knows, the official tax-collecting body are the Inland Revenue. As it happens, they have an official web site: http://www.inlandrevenue.gov.uk.

    If you go to the site, click on 'Individuals' (left panel), scroll down and click 'Self Assessment' (under features), and then scroll down again and click 'Self Employed'.

    A few key points (No warranty - I'm an amateur - check these for
  • Well, you're already late. For Corps the due date is March 15th, not April 15th. For the Feds, go to the IRS website and get the fill-in PDF for the taxes. It's fairly simple and only takes a couple of hours to do. Basically you enter zeroes for most stuff. If you're in CA, you have to pay the Alternative Minimum Tax, which is an $800.00 kickback you pay to the state for having a corp. You pay AMT if you have less than $800.00 in taxes, otherwise you just pay your tax amount.
    The federal form is 1120,

  • Biggest tip of all (Score:2, Insightful)

    by Bingo Foo ( 179380 )
    Send it certified mail.
    I mailed in my forms in late February and haven't gotten my Federal refund back yet. I'm biting my nails wondering if my forms even got there at all.
    • If you're concerned about it getting there, send it UPS or FedEx. Both offer guaranteed service. There is no service offered by the USPS which carries the same guarantee on all of UPS's services (both air and ground) and all of FedEx's air services.

  • It's very simple (Score:2, Informative)

    by brundlefly ( 189430 )
    1. File an extension, so you can legally postpone your tax return filing beyond April 15th. You can download one in PDF form from the IRS and you can even telephone it in. The extension form takes less than 2 minutes to complete.

    2. Talk to a tax accountant. It will cost you anywhere from $100-$500 and it can save you upwards of $1000. The first year I used one I saved myself $1400 over what I had computed for myself. The next year, benefitting from the free advice he had given me the first year, I sav

  • Zero expenses and zero revenues: DON'T FILE! (Score:5, Informative)

    by YetAnotherName ( 168064 ) on Saturday April 12, 2003 @08:07PM (#5718483) Homepage
    Look, if you had practically zero revenues offset by practically zero expenses, don't even file schedule C and schedule SE.

    I make my living completely by estimated tax payments through the year along with schedule C, forms 4562 and 8829, and schedule SE. But if all you did was on the side and resulted in no profit, the IRS won't give a flying fuck.

    Unless a client of yours sends you a 1099.

    And I hate to sound like a character from Gilliam's Brazil, but a 1099 establishes a paper trail, and then the IRS will want to know why you didn't make an estimated tax payment on that income.

    That leads to all sorts of ugly things like the annualized installement method on form 2210 which is complex but approachable with a spreadsheet program.

    The upshot is, don't bother if you're not on even IRS's radar (which is like under $600 for most contractor/client relatioships). If you are on the radar, then do all the section 179 deductions you can for your tangible property (computers, etc.) on form 4562, do business expense of your home on form 8829, and, of course, do schedule C for profit/loss and schedule SE for self-employment tax.

    And this year, start doing esitmated tax payments using form 1040-ES . Remember they're due four times a year (4.15, 6.15, 9.15, and 1.15 of the next year). The IRS likes to see the amount of each payment be the same and if they're not (because your income through self-employement throughout the year is not the same) then file form 2210 (underpayment) even if you didn't underpay. It's basically where you get to explain why your payments aren't the same throughout the year.

    Finally, don't give H&R Block the time-of-day. If you can follow instructions, add, subtract, multiply, and divide, and, most importantly, be patient, you can file your own taxes. I used to pay a professional to fill out mime. Problem was, I filled them out ahead of time to see if we got the same answers. We did. After that, I said "Fuck you H, fuck you R, and most certainly fuck your Block!" It really is not that hard to file income tax.

    And never forget: IRS sucks.
  • Don't wait til now to do taxes. If you run your own business you should have everything you need to do your taxes without having to wait for anything to be mailed to you.

    I've been using TaxCut for the last few years for my personal taxes and this year was the first time I used it for my business. It made it real easy. I just needed to know how much I made (zero) and how much my expenses were (~400). Next year I'll have earnings and expenses to put in.

    The rest was handled by the program. Just keep goo

  • I must agree (Score:2, Informative)

    by lost sheep ( 605129 )
    As a small business owner, and son of accountants, I must agree that you need an accountant. In fact, I was discussing this the other with a few local businessmen the other day. Accounts are vital not only because they know where to put the zero's on your forms, but they also know things like the filing date (not April 15) for businesses. They also know how to approach write-offs and tax credits so that you can not only avoid paying excess taxes now, but in the future (you knew you could write off past tax

  • OMFG (Score:2, Flamebait)

    by t0ny ( 590331 )
    Ask Slashdot with yet another stupid, inane question.

    Ok, Assnozzle, here is the answer to your question- Do your taxes yourself! Wow, since you state they are pretty much all zeroes, lots of people tend to pick up a pen and write them zeroes in -all on their own-!!!!

    Doing something for yourself, what an amazing concept. And also, if you are all into using computer assistance, there are all kinds of Tax Software!!! Wow, what an amazing world we live in!!

  • My only peice of advise on taxes:

    1) Pay them.
    2) Use tax software

    Doing #1 avoids lots of expensive and time consuming issues like jail and fines. Using #2 saves lots of time.

    $G
  • I happen to have a friend that's an accountant and also a complete idiot about computers, so I offer him tech support, which he rarely needs/uses, and in exchange he does my taxes for me every year. their very complicated, but I don't have to worry about them any more.

  • If you own a C or S corp... (Score:3, Informative)

    by dentar ( 6540 ) on Saturday April 12, 2003 @10:22PM (#5719158) Homepage Journal
    always hire a professional.. not one of these H&R block creeps either.

  • Every year, my accountant does my taxes, and he gets one free maintenance visit from me for his computer in exchange.

    I prefer to let him handle my taxes, because he knows all the tips and tricks to minimize my payment/maximize my refund, and I don't have to dick around with forms and receipts other than throwing them all in a folder to give to him. He prefers to let me service his computer, because I know all the tips and tricks to keep it humming along, and he doesn't have to dick around with Windows/driver/application/virus definition updates and whatnot other than to make a short list of any problems he's having.

    ~Philly

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