My tax lady is boggled

Jim Williams

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She can't believe that I make so much and spend so little. She told me to go home and dig up some more receipts, but unfortunately I don't have any. Some of us don't go out and buy every new toy that get's hyped on carpet cleaning forums. When you have 3 people to support and one who is diabetic and has to spend $700 a month to stay alive you just can't spend money aimlessly on your business, therefore you get to pay a boat load of taxes. My expenses usually only run around 10% of my gross each year. I buy a bucket of Cobb's prespray once a year, a jug of Procyon, gas, insurance, cell phone and a few spotters and other items like towels and that's it. Oh, and I do depreciate my van and truckmount that I bought 14 months ago.

Just curious what % of gross other owner operators spend?
 
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She can't believe that I make so much and spend so little. She told me to go home and dig up some more receipts, but unfortunately I don't have any. Some of us don't go out and buy every new toy that get's hyped on carpet cleaning forums. When you have 3 people to support and one who is diabetic and has to spend $700 a month to stay alive you just can't spend money aimlessly on your business, therefore you get to pay a boat load of taxes. My expenses usually only run around 10% of my gross each year. I buy a bucket of Cobb's prespray once a year, a jug of Procyon, gas, insurance, cell phone and a few spotters and other items like towels and that's it. Oh, and I do depreciate my van and truckmount that I bought 14 months ago.

Just curious what % of gross other owner operators spend?
Are you also reporting the expenses of you and your kid's personal medical, and your expenses on your kid's education? I always gave my CPA a report on that, and he was able to use that as a tax write-off. There was something different with the new tax law that made that write-off not as good as the previous years, but I think it can still be done
 

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She can't believe that I make so much and spend so little. She told me to go home and dig up some more receipts, but unfortunately I don't have any. Some of us don't go out and buy every new toy that get's hyped on carpet cleaning forums. When you have 3 people to support and one who is diabetic and has to spend $700 a month to stay alive you just can't spend money aimlessly on your business, therefore you get to pay a boat load of taxes. My expenses usually only run around 10% of my gross each year. I buy a bucket of Cobb's prespray once a year, a jug of Procyon, gas, insurance, cell phone and a few spotters and other items like towels and that's it. Oh, and I do depreciate my van and truckmount that I bought 14 months ago.

Just curious what % of gross other owner operators spend?
When I started I had the same issue. I realized if you don't spend it on the business you give it to uncle Sam.

We pay income tax on about 1/4 of our earnings now.
 
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Jim Williams

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I asked her a
Are you also reporting the expenses of you and your kid's personal medical, and your expenses on your kid's education? I always gave my CPA a report on that, and he was able to use that as a tax write-off. There was something different with the new tax law that made that write-off not as good as the previous years, but I think it can still be done
I asked her about medical but to deduct those you have to use itemized deductions instead of the standard deduction which is now $24,000 for a couple.
 

bob vawter

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You'd be surprised to learn how much it costs for upkeep and fuel costs on a 39' Cigarette ......jus the wrap wit yor company name is a fortune...heps wit that peskey income.....
 
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bob vawter

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make sure ot contribute to your 401k/ ira
That's all "air" money......
Made by the Feds ..right outta thin air.....there will come a day when it's not there no mo......they already "borrowed "
Yor social security money ya know....and
I'M going to take the rest.....
 

rider0992

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The great thing about janitorial, carpet cleaning and floor care. A lot of expenses. We went to twenty five employees, even though it’s a headache, it pays. Sometimes I still act like a O/O. Old habits are hard to break.
 
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She can't believe that I make so much and spend so little. She told me to go home and dig up some more receipts, but unfortunately I don't have any. Some of us don't go out and buy every new toy that get's hyped on carpet cleaning forums. When you have 3 people to support and one who is diabetic and has to spend $700 a month to stay alive you just can't spend money aimlessly on your business, therefore you get to pay a boat load of taxes. My expenses usually only run around 10% of my gross each year. I buy a bucket of Cobb's prespray once a year, a jug of Procyon, gas, insurance, cell phone and a few spotters and other items like towels and that's it. Oh, and I do depreciate my van and truckmount that I bought 14 months ago.

Just curious what % of gross other owner operators spend?
Are you taking a home office deduction? Mileage for use of personal vehicles for any and everything you can justify as business use? Estimates, errands, supply runs, training, etc?

How is your business structured? Just for example, if you're netting $80,000, you could pretty easily save about $8,000 in self-employment tax by filing as an S-Corp.

Hopefully your accountant is being proactive in strategizing on this stuff with you.
 

bob vawter

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Ya most CPAs are chicken shit....why should they care....its not their money!
It's better to fight over a deduction than be a dumb ass any pay every year....
Rule#1.....when called in for an audit....
Bring yor receipts in a shopping bag and yor invoices in a shoe box....
Be very polite while sitting them on his table.....
You'll be surprised at how fast he'll broom you out the door...



OR.....he'll get all red in the face and argue some trivial argument that he know he can win.......and you pay up anyway
 
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bob vawter

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Ya most CPAs are chicken shit....why should they care....its not their money!
It's better to fight over a deduction than be a dumb ass any pay every year....
Rule#1.....when called in for an audit....
Bring yor receipts in a shopping bag and yor invoices in a shoe box....
Be very polite while sitting them on his table.....
You'll be surprised at how fast he'll broom you out the door...



OR.....he'll get all red in the face and argue some trivial argument that he knows he can win.......and you pay up anyway
 

Nomad74

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Ya most CPAs are chicken shit....why should they care....its not their money!
It's better to fight over a deduction than be a dumb ass any pay every year....
Rule#1.....when called in for an audit....
Bring yor receipts in a shopping bag and yor invoices in a shoe box....
Be very polite while sitting them on his table.....
You'll be surprised at how fast he'll broom you out the door...



OR.....he'll get all red in the face and argue some trivial argument that he know he can win.......and you pay up anyway
I want a CPA that isn’t afraid of going to prison.
 

Jim Williams

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Are you taking a home office deduction? Mileage for use of personal vehicles for any and everything you can justify as business use? Estimates, errands, supply runs, training, etc?

How is your business structured? Just for example, if you're netting $80,000, you could pretty easily save about $8,000 in self-employment tax by filing as an S-Corp.

Hopefully your accountant is being proactive in strategizing on this stuff with you.
I save every receipt I can dig up, those receipts are like gold at tax time. I will ask her if becoming an S-corp would help. Right now I'm a sole proprietor. She's all about paying as little as possible, and she seems pretty knowledgeable. Maybe I need a bigger home office. The one I use now is so small it wasn't saving much in taxes. I could probably consider my kitchen my office since that's where I do most stuff anyways.
 

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I save every receipt I can dig up, those receipts are like gold at tax time. I will ask her if becoming an S-corp would help. Right now I'm a sole proprietor. She's all about paying as little as possible, and she seems pretty knowledgeable. Maybe I need a bigger home office. The one I use now is so small it wasn't saving much in taxes. I could probably consider my kitchen my office since that's where I do most stuff anyways.
Lol, don't get crazy... Home office deduction is something the tax man pays a lot of attention to.


We saved a poop ton of dough this year, compared to previous years.

The 20% deduction for self employed is huge and should help grow "micro" small business like ours.
 
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Desk Jockey

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Ya most CPAs are chicken shit....why should they care....its not their money!
It's better to fight over a deduction than be a dumb ass any pay every year....
Rule#1.....when called in for an audit....
Bring yor receipts in a shopping bag and yor invoices in a shoe box....
Be very polite while sitting them on his table.....
You'll be surprised at how fast he'll broom you out the door...



OR.....he'll get all red in the face and argue some trivial argument that he know he can win.......and you pay up anyway
The business was audited twice. Neither a big deal, almost a break even from things that we missed. All she counted of cash receipts was half and gave credit for the rest. So as long as you have half, you're probably fine.
 
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bob vawter

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I gotta say.......I got audited once.....and did
Exactly as I explained....my bookkeeper went with me......she had an answer for every stupid question that doofus asked us.......I was sh*ting bricks the whole time....
We walked outta there clicking our heels.....of course that was a long time ago
.
They HAVE upped their game ......
Soo this post is in no way an endorsement
For cheating the IRS!

Again......I can't describe the look on their face when you plop two plastic bags down on the desk
 
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Desk Jockey

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They audited 10 years apart, both times the auditor spent a week at our office. Awkward but fairly painless. The labor auditor spent 3 days and I was fined $700.00 for over working my 16 old at the time. As a corporation he was treated like any other employee instead how my father worked us.
 
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bob vawter

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My audit was an interesting experience....
First thing he decides to play my little game I brought him.......he put one hand over his eyes and reached into the receipt....carefully reading what I bought.
Sears....50ft garden hose.....
"Now what would a carpet cleaner use a garden hose for"?
So I had to explain how I hook up to the house for water...
"Well that makes sense " he mumbles..
So He reaches in my plastic sack with his eyes covered again..so this time he pulls out a receipt for an eighteen foot extension ladder.......I could read his face
"Soooo.what would a carpet cleaner do with such a ladder"
So i told him it was for changin lite bulbs in my high ceiling shop.......for which i jus happened to have a picture of...
Waiting for my turn.....finding his little cubicle. Talking to him.........
I was in and out in less than an hour.....walking back out wit my plastic bags.....never bothered me again
 
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rider0992

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I got a labor audit just in the last month. My CPA handled it. It came out fine. You definitely need to be a S Corp.
 

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