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Help me spend some money!
Found out how much I owe in taxes today...
TammyJo




msg:313055
 12:02 am on Dec 16, 2005 (gmt 0)

Hi ya'll!

Got the scoop on my tax outlook for the year...advice is needed:

If you had 15 days to reduce some of the money you will be owing come April, what would you do, buy, invest in etc?

There is not much overhead in an online business, all creative, legitimate ideas welcome.

I never thought I would see the day where I actually was required to spend money.

 

jsinger




msg:313085
 7:39 pm on Dec 20, 2005 (gmt 0)

I think a lot of this depends on whether you're on cash basis or accrual accounting.

With accrual, a sale, for example, is treated as revenue when it is completed, not when you receive or deposit the check. We're a "normal" C corp (U.S.) and use accrual accounting. There's not much that can be done at the last minute. At best, you can squeeze a few bucks of income from this year into next.

I do get a year end bonus, which generally wipes out most of our corporate tax liability. Of course, I have to pay high personal taxes on it as additional income.

My rule: nothing is worth the agony of an audit. We stay pretty far back from the line.

Brett_Tabke




msg:313086
 8:13 pm on Dec 20, 2005 (gmt 0)

> nothing is worth the agony of an audit.

Talked to a tax guy today. He says: "filing a return is like your best offer".

He's been in independent tax biz for 10 years with a 5 partner firm (40 people) doing thousands of biz tax returns a year. They have seen 1 audit in that entire time. The odds of a small biz audit hands on? 1 in about 3 million.

Leosghost




msg:313087
 9:59 pm on Dec 20, 2005 (gmt 0)

Brett ..that depends on the ratio of auditors to taxpayers ..here it is approx ..one in 1000 self employed people get audited ( some areas of business are as high as 1 in 500 .."webwork" is looked at like home hairdressers .."red flagged"..special attention ..same as plumbers ..) companies with more than 1 employee average 1 in 5000 returns ..

The average self employed or small business person ( les than 100 employeess can count on being audited around once in 12 years ) ..once in 5 years if less than 5 employees ..

you need to keep your paperwork for 30 years ..!

Turning someone in to the taxman gets you 10% of whatever the taxman gets from them ..the individual taxman gets 10% also of the recovered penalty ..

( I know this cos a very very good friend is a taxman here ..France ..I have seen the paperwork to back up what I say )..on more than one ocassion ..plus it is acknowledged on govt websites ..

Metermaids get 15% of the ticket ..cops get 10% of the speeding fine etc ..

I could continue ..just count your blessings :)

Brett_Tabke




msg:313088
 11:50 pm on Dec 20, 2005 (gmt 0)

so you forget to file a 1099 - thousands upon thousands of people do each year. So they send out an automated letter. They call that an audit.

jsinger




msg:313089
 4:21 pm on Dec 21, 2005 (gmt 0)

Neither my business nor I have ever been audited by the feds. But sales tax audits happen from time to time. I can't recall them ever challenging anything. One day and they're gone. But assembling the docs they need can be hard work.

We use a small but very reputable CPA. I'll guess the IRS looks at who does the returns when they decide whom to audit. Some small time tax preparers are really sleazy.

ispy




msg:313090
 6:08 am on Jan 5, 2006 (gmt 0)

I dont get it. Are you saying that donating to some charitable cause before the end of the year will actually save you money over keeping the money yourself? I guess this is possible if you are talking about a huge amount of dough to lower your tax bracket, but this would be very rare. It takes a huge amount of write off for tax purposes to save even a small amount of money on your tax bill.

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