"businesses get the shaft"...only if they do things by the book. I have no doubt that the business people you are speaking of get away with claiming personal expenses as business expenses. That doesn't make it legitimate. There are always ways to get around the system. Just don't get caught..
Taxes: DIY or CPA
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Like the CPA told me, no small business wants to have the IRS come in. Since when did legitimate have anything to do with the whole deal? Nothing like charging the bill for work on the pool house to having a machine moved, or having the riding mower picked up, serviced and delievered to their home but billing the company. More examples but you get the idea.
Originally Posted By: 65cuda
Like the CPA told me, no small business wants to have the IRS come in. Since when did legitimate have anything to do with the whole deal? Nothing like charging the bill for work on the pool house to having a machine moved, or having the riding mower picked up, serviced and delievered to their home but billing the company. More examples but you get the idea.
So this is typical? Or I do this?
I think not. Using illegal activities as examples didn't exactly make your point at all. LEGAL Businesses get screwed in the USA.
There are many good things about owning businesses, but taxes are not one of them. Yes taxes must be paid - it's the complexity that gets my goat. Ultimately the consumer pays these taxes, so why make such an insane system for collection?
Like the CPA told me, no small business wants to have the IRS come in. Since when did legitimate have anything to do with the whole deal? Nothing like charging the bill for work on the pool house to having a machine moved, or having the riding mower picked up, serviced and delievered to their home but billing the company. More examples but you get the idea.
So this is typical? Or I do this?
I think not. Using illegal activities as examples didn't exactly make your point at all. LEGAL Businesses get screwed in the USA.
There are many good things about owning businesses, but taxes are not one of them. Yes taxes must be paid - it's the complexity that gets my goat. Ultimately the consumer pays these taxes, so why make such an insane system for collection?
Originally Posted By: 65cuda
Like the CPA told me, no small business wants to have the IRS come in. Since when did legitimate have anything to do with the whole deal? Nothing like charging the bill for work on the pool house to having a machine moved, or having the riding mower picked up, serviced and delievered to their home but billing the company. More examples but you get the idea.
Risk a big penalty and interest, or worse, pen time, for twenty or thirty thousand dollars?
Pass.
The whole point of having an outside accountant do the taxes, is to have it done right.
I've had people tell me they cheat on their taxes because they believe everybody else cheats. I can't speak for anyone else, but I don't cheat.
Like the CPA told me, no small business wants to have the IRS come in. Since when did legitimate have anything to do with the whole deal? Nothing like charging the bill for work on the pool house to having a machine moved, or having the riding mower picked up, serviced and delievered to their home but billing the company. More examples but you get the idea.
Risk a big penalty and interest, or worse, pen time, for twenty or thirty thousand dollars?
Pass.
The whole point of having an outside accountant do the taxes, is to have it done right.
I've had people tell me they cheat on their taxes because they believe everybody else cheats. I can't speak for anyone else, but I don't cheat.
Like I said though it was a CPA that told me about small businesses fudging. So evidently there are enough that do and take the risk. Sorry but I don't feel sorry for the small business.
Originally Posted By: 65cuda
Sorry but I don't feel sorry for the small business.
Not asking for any pity, just pointing out the facts. If you want to think your way, nothing wrong with that.
Sorry but I don't feel sorry for the small business.
Not asking for any pity, just pointing out the facts. If you want to think your way, nothing wrong with that.
Originally Posted By: Win
I've had people tell me they cheat on their taxes because they believe everybody else cheats. I can't speak for anyone else, but I don't cheat.
I wonder how many pay their state's "use tax" when they buy stuff mail order from out of state (no tax). At tax time does everyone add up these purchases and then claim them for tax payment?
My coworker says that ignoring the use tax is no different than driving 75 mph in a 70 mph zone.
I've had people tell me they cheat on their taxes because they believe everybody else cheats. I can't speak for anyone else, but I don't cheat.
I wonder how many pay their state's "use tax" when they buy stuff mail order from out of state (no tax). At tax time does everyone add up these purchases and then claim them for tax payment?
My coworker says that ignoring the use tax is no different than driving 75 mph in a 70 mph zone.
Originally Posted By: doitmyself
Originally Posted By: Win
I've had people tell me they cheat on their taxes because they believe everybody else cheats. I can't speak for anyone else, but I don't cheat.
I wonder how many pay their state's "use tax" when they buy stuff mail order from out of state (no tax). At tax time does everyone add up these purchases and then claim them for tax payment?
Point made exactly. As a business I have to pay the statesales use tax regardless of where I bought the product used in the business. Individuals never pay this tax.
Originally Posted By: Win
I've had people tell me they cheat on their taxes because they believe everybody else cheats. I can't speak for anyone else, but I don't cheat.
I wonder how many pay their state's "use tax" when they buy stuff mail order from out of state (no tax). At tax time does everyone add up these purchases and then claim them for tax payment?
Point made exactly. As a business I have to pay the state
In Michigan, businesses are exempt(use tax) for: "business purchases used for resale". At least that's what I read about something I have no knowledge on.
Sorry to sway off topic.
Sorry to sway off topic.
Originally Posted By: doitmyself
In Michigan businesses are exempt(use tax) for: "business purchases used for resale". At least that's what I read about something I have no knowledge on.
Sorry to sway off topic.
Of course. Same everywhere. If I resell it, then no use tax, just tax on the profit, then collect sales tax and pass it on. Use tax is like for paper, or ink or whatever you use in the business. For example If I buy a business PC from Georgia I have to pay WA state "use tax" at my local sales tax rate.
In Michigan businesses are exempt(use tax) for: "business purchases used for resale". At least that's what I read about something I have no knowledge on.
Sorry to sway off topic.
Of course. Same everywhere. If I resell it, then no use tax, just tax on the profit, then collect sales tax and pass it on. Use tax is like for paper, or ink or whatever you use in the business. For example If I buy a business PC from Georgia I have to pay WA state "use tax" at my local sales tax rate.
I *think* my state only collects compensating use tax on items brought in from out of state and that have a title or registration or similar equivalent.
I've always had to pay compensating use taxes on airplanes brought in from out of state.
They collect it on cars from out of state at the time of first registration in the state.
I've never had it come up on the nickel and dime stuff bought on the internet.
I've always had to pay compensating use taxes on airplanes brought in from out of state.
They collect it on cars from out of state at the time of first registration in the state.
I've never had it come up on the nickel and dime stuff bought on the internet.
Win - I didn't used to either. It's new. Talk to your tax guy.
We've always had it, and it applies to all (non exempt) tangible personal property brought into the state for use or storage, but afaik, on the consumer side, they've never done anything with it other than to capture the really easy money, low hanging, fruit - airplanes, cars, and the like.
The state put out a consumer reporting form last summer, but it's not where any consumer is ever likely to find it. I don't think they even bother auditing individuals since there's no significant money to be made there, so business will bear the brunt of whatever collection efforts, if any, they make. All my business property is exempt or was bought in state, so it won't be an issue for me. I don't even deduct sales taxes unless it's a big item like a car.
I feel for you when you're made to get a sales tax permit and have to collect and remit sales tax to the individual states you sell in.
The state put out a consumer reporting form last summer, but it's not where any consumer is ever likely to find it. I don't think they even bother auditing individuals since there's no significant money to be made there, so business will bear the brunt of whatever collection efforts, if any, they make. All my business property is exempt or was bought in state, so it won't be an issue for me. I don't even deduct sales taxes unless it's a big item like a car.
I feel for you when you're made to get a sales tax permit and have to collect and remit sales tax to the individual states you sell in.
I think if they tried to collect from the sheeple they would wake up. No, probably not. Our state is ridiculously and overly complex.
Originally Posted By: Win
Quote:
... don't go to a place that has a clown out front waving you in. Far worse than two others I saw mentioned above.
Even worse: letting a car dealer do the taxes so the "refund" can make a down payment on a car.
Not surprisingly the local Suzuki dealer is pushing this pretty hard.
FREE MONEY!!!!!!!! NO CREDIT, BAD CREDIT, NO JOB, NO MONEY, NO PROBLEM!!!! EVERYBODY RIDEZ 2DAY!!!!!!!!
Quote:
... don't go to a place that has a clown out front waving you in. Far worse than two others I saw mentioned above.
Even worse: letting a car dealer do the taxes so the "refund" can make a down payment on a car.
Not surprisingly the local Suzuki dealer is pushing this pretty hard.
FREE MONEY!!!!!!!! NO CREDIT, BAD CREDIT, NO JOB, NO MONEY, NO PROBLEM!!!! EVERYBODY RIDEZ 2DAY!!!!!!!!
A small business does not have to do anything dishonest in order to get some pretty good deductions. On the other hand, many small business people are at a disadvantage compared to an employee because he can't get the benefits, unless he or his CPA know how. A good example of small business deductions is the auto mileage deduction. 55.5 cents per mile for each and every business mile driven. That adds up way faster than people realize. Another example is tax deductible trips. This gets misused a lot, but it doesn't have to be. If the primary purpose of the trip is business, it doesn't matter that I visited my married son and daughter-in-law. I don't pay for home stuff and deduct it, that is called fraud, but I do buy stuff for my office, like art, that I don't really need, yet still falls under the classification of ordinary and necessary.
A farmer has no excuse for living above the poverty level. He may have multi millions of dollars in land and equipment, but if he and his CPA know what they are doing he is incorporated and living in a corporation provided home as a condition of employment. A small business like mine can do other things to legally move personal expenses to the business. However, do it wrong and you will get nailed in an audit and have to pay.
One thing you cannot do, yet it is often advised, is to for a Sub-S corp and not pay yourself a salary, or pay a low salary, and take the rest as dividends not subject to self employment tax. That was legal long ago, but Congress closed that loophole in the 80s.
For the simple return, you may be able to do it yourself. I would not without software. You can do like someone said and pay $ 65 for the software and still wonder if you are doing it right. Or, you can pay more and get it done right by a professional who does this stuff all year long and doesn't have to cover all his overhead in 2 1/2 months, like the chain guys do. I am not out to get rich doing this and can prepare a long form return with the state for $ 130. I make satisfactory money doing that and can feel good that my clients are getting more value for what they pay me than they would at one of the chains, or the other guy or gal who only operate 3 months a year.
A farmer has no excuse for living above the poverty level. He may have multi millions of dollars in land and equipment, but if he and his CPA know what they are doing he is incorporated and living in a corporation provided home as a condition of employment. A small business like mine can do other things to legally move personal expenses to the business. However, do it wrong and you will get nailed in an audit and have to pay.
One thing you cannot do, yet it is often advised, is to for a Sub-S corp and not pay yourself a salary, or pay a low salary, and take the rest as dividends not subject to self employment tax. That was legal long ago, but Congress closed that loophole in the 80s.
For the simple return, you may be able to do it yourself. I would not without software. You can do like someone said and pay $ 65 for the software and still wonder if you are doing it right. Or, you can pay more and get it done right by a professional who does this stuff all year long and doesn't have to cover all his overhead in 2 1/2 months, like the chain guys do. I am not out to get rich doing this and can prepare a long form return with the state for $ 130. I make satisfactory money doing that and can feel good that my clients are getting more value for what they pay me than they would at one of the chains, or the other guy or gal who only operate 3 months a year.
I saw this all the time with my soldiers back in the day when I was a platoon leader and a company XO. There were many outfits that preyed on the lack of knowledge many young 18 or so year old soldiers had with respect to taxes.
The smart ones paid attention the the First Sergeant when he mentioned the LT was the unit tax officer and had been trained on how to fill out simple 1040EX and 1040A tax returns.
I could do almost any of the single soldiers returns, most married lower enlisted, etc.
I wouldn't tackle anyone with investments, etc that took a long form 1040.
But many of the still fell for the paying someone else to do their return, even a 1040EZ.
Apparently, they've upped the game with getting your taxes done at a car dealership "for free" to use the refund to buy a car.
They would hate me, no refund
The smart ones paid attention the the First Sergeant when he mentioned the LT was the unit tax officer and had been trained on how to fill out simple 1040EX and 1040A tax returns.
I could do almost any of the single soldiers returns, most married lower enlisted, etc.
I wouldn't tackle anyone with investments, etc that took a long form 1040.
But many of the still fell for the paying someone else to do their return, even a 1040EZ.
Apparently, they've upped the game with getting your taxes done at a car dealership "for free" to use the refund to buy a car.
They would hate me, no refund
Originally Posted By: Pablo
Win - I didn't used to either. It's new. Talk to your tax guy.
Just got off the phone with him. I didn't get the business letter that was sent out, as I don't have to collect state sales tax (yet). Business wise, it's a non issue for me, since what I buy is taxed and collected at point of sale.
But, as respects the personal use/ consumer side, there is now an actual form for Joe Sixpack to report it on, and it has to be reported, as frequently as monthly, depending on what you owe. So, an hour of looking at the DFA website, phone call, and gathering records, equals $22.65 consumer use tax liability for the applicable period. I won't estimate cost of compliance
.
One of the interesting questions he posited to me was to the effect, what about the guy that buys something like cigars on the internet? How does he comply with the state tobacco tax? Or any other item that has tax beyond the compensating use tax?
What a PITA. I can see where this is going. After a few years of near total non compliance from the consuming public in sending in the form and tax, there will be some hard tax evasion data that will be used to force internet sellers to collect and remit state sales taxes, or give up the names and addresses of their customers to the states so they can send them a collection notice.
Win - I didn't used to either. It's new. Talk to your tax guy.
Just got off the phone with him. I didn't get the business letter that was sent out, as I don't have to collect state sales tax (yet). Business wise, it's a non issue for me, since what I buy is taxed and collected at point of sale.
But, as respects the personal use/ consumer side, there is now an actual form for Joe Sixpack to report it on, and it has to be reported, as frequently as monthly, depending on what you owe. So, an hour of looking at the DFA website, phone call, and gathering records, equals $22.65 consumer use tax liability for the applicable period. I won't estimate cost of compliance
One of the interesting questions he posited to me was to the effect, what about the guy that buys something like cigars on the internet? How does he comply with the state tobacco tax? Or any other item that has tax beyond the compensating use tax?
What a PITA. I can see where this is going. After a few years of near total non compliance from the consuming public in sending in the form and tax, there will be some hard tax evasion data that will be used to force internet sellers to collect and remit state sales taxes, or give up the names and addresses of their customers to the states so they can send them a collection notice.
Michigan is belly aching about losing many millions of dollars in use tax money and they seem to be stepping up efforts to remedy this.
In fairness to in-state businesses, especially brick and mortar places, think about the consequences if somebody can save a substantial amount of money if they order something on line and not pay taxes. Many places, like Amazon, often have free shipping to boot.
Yes, everything will all even out in the wash, maybe, with extra headaches for all involved.
In one breath, we complain about the poor quality and/or expense of local auto stores, etc.. Then we turn around and don't support their business costs by ordering from Rock Auto. Not too different an argument from that of the Walmart haters.
In fairness to in-state businesses, especially brick and mortar places, think about the consequences if somebody can save a substantial amount of money if they order something on line and not pay taxes. Many places, like Amazon, often have free shipping to boot.
Yes, everything will all even out in the wash, maybe, with extra headaches for all involved.
In one breath, we complain about the poor quality and/or expense of local auto stores, etc.. Then we turn around and don't support their business costs by ordering from Rock Auto. Not too different an argument from that of the Walmart haters.
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