Forum Moderators: phranque
Do you happen to have a favorite tax dedutible? If so what is it.
Do you know something that might help us other webmasters, save a dime or two, let us in on it...
Tax deductions are only worth the value of the tax bracket you're in. And I'd sure as hell want to take that money home that give it to the IRS as a business tax deduction.
For example: let's say you go out and buy the SuperDuperXYXMonsterBox computer for $5000 for your business. The IRS will "allow" you to depreciate that piece of equipment over a period of time, or "allow" you to take a full-value deduction up to a certain dollar amount in one calendar year.
What this means is that you can deduct up to the full purchase price of that computer, and offset that cost against your income. Not against your tax liability--your income.
So, let's say you made $50,000 this year. And that you're operating as a sole proprietor. That means that your taxable income is now reduced to $45,000. And so it goes for every deductible piece of equipment you purchase.
However, that $5000 you spent on the Superbox is $5000 that you didn't pay yourself in income. And you're not going to gain or lose anything in terms of tax liability.
So, would you rather have that $5000 in your pocket, or sitting on a table?
That question is yours alone to decide.
The whole issue of tax deductions got distorted back in the 1980's, and a lot of people still are confused (confusion is part of government fuction, so don't feel slighted).
Before 1986, you could deduct credit card debt, car loan interest, and all sorts of other things that now seem questionable.
There really aren't too many ways to escape the tax code, until you reach the ranks of the Bill Gates or Steve Jobs. Not saying they're scamming, but they can set up things such as charitable trusts that are tax-deductible.
About the only charitiable trust I could set up would be one for a hamster.
Good luck on your taxes.
A deductible is only deductible if you can document it.
I think you missed the point of the thread. Dpeper wants to know, I presume, not how to spend more money so he can take a tax deduction. That would, in fact, be idiotic.
I think s/he is trying to find ways to reclassify ordinary expenses as a business expense. This can be, depending on circumstances, perfectly legitimate or skirting the tax law.
I took a plane flight recently to my parents home. But while there - indeed, truly, the reason for booking the flight although it need not have been - was to meet with a potential business partner and to try to make contact with a search engine employee to get questions answered. And I set my parents up with DSL and put a program on their computer to monitor my web server to alert me if it's down (and to handle a couple of other administrative functions relating to monitoring a competitor that I'd rather do from another IP address).
You can bet that I am going to classify both my flight and my parents' new DSL connection as a business expense. That's perfectly legitimate and, well, I'm not Bill Gates.
Donny
i don't think there is anyone who wouldn't gain from employing a real pro no matter how big or small they are.
Just some of many deductions I use: mileage (every last bit); entertainment (not just dinner, but any drinks after hours. If I take a client target shooting, I write off the ammo); health insurance (I'm incorporated, so it's 100%); any kind of rentals at all, whether it's computers or some other things.
I work out of my home, but I do not deduct any cost for my office, since it's in a room that has a clothes closet, as well as other things. Writing off a home office expense is a good way to get audited.
On the other hand, in our previous house, the office was 100% for business. Therefore, I took measurements of the room, calculated the percentage of the entire house it occupied, and wrote off everything accordingly: house insurance, heating, electricity, mortgage interest, etc. I did so because I could prove that the office was 100% for business.
especially with home deduction, be careful about what he says: it is a red flag for auditors. if it's a tiny amount of space compared to your overall space, the writeoff may well be smaller than the risk of getting audited. but it can be worth doing, especially if, for example, you have some serious work that needs to be done in your home office. you an write off those costs as a business expense. it's a nice chance to repair a small part of your home in a tax-deductible way.
Pubcon. :)
Second phone line / cell phones. Put the number on your business card or in your whois info. Special services on your phone line - call waiting, voice mail, etc.
Books / magazines / subscriptions / private forum subscriptions.
DSL / dial-up/ cable costs.
Office equipment - chairs, back pads, rugs, phones.
Post office supplies.
PCs and related equipment.
Software related to your business.
Logo designs.
Gifts with promotional logos for your business on them.
Web hosting / domain registrations / directory fees / advertising.
Business cards / office supplies / paper / whiteboards.
Contribute to your own retirement plan.
Business insurance.
Labor expenses paid to your children for working in your business. Deductible to you, not taxed to them under $4700 in 2003. Depending on their ages they can clean your office, do link exchanges, rank checking, check your competitors backlinks for you, check for dead links, write content for your sites, etc.
Business travel.
Business events / parties.
Accountant / financial planner / attorney fees related to your business.
Business meals (50%).
Disclaimer: I'm not a tax professional, the above ideas are for information pusposes only. See your tax advisor to determine exactly what expenses are deductible in your spcific circumstances.
