SHOULD MY STARTUP BIZ GET AN IRS REFUND????

[breathe72]

Im well into my 2nd year as an O/O and have recently spoke to two local cleaners who are looking forward to their IRS refunds this year.

I mentioned that our 1st year (last year) we did not get a refund, and they were in disbelief, basically saying I need to find a new CPA asap. (Boasting how they get several thousand back each year)

Everything we do is accounted for, gas, chem, parts, uniforms, you name it. We financed and have easily another 4 years of payments on loans for equip, etc. as well.

Any suggestions/examples/experience some of you may have regarding write-offs, deductions, etc.., especially pertaining to getting a refund at the end of the year would be extremely helpful.

 

[Dolly Llama]

welp, i ain't no tax eXpErt, but If they're getting "thousands" back every year, they're probably paying too much in.

The Gub'mint ain't "giving" them anything

..L.T.A.

 

[Ken Snow]

I agree with Meat, although it could be also that they are S corps or LLC's and have passive losses due to real estate components etc. You would have to know their whole situation before being able to judge why.

All that really matters in the end is total tax not whether or not there is a refund. And really more important is making money, which if you do you pay tax.

Ken

 

[Jim Williams]

You won't get a refund unless you paid too much in quarterly taxes. Your business startup expenses can be deducted over several years to bring your taxable income down to zero but just because you made a negative amount doesn't mean the government will send you money. It means you made zero.



Be sure and keep track of when you run out of those expenses to deduct so you don't get caught with your pants down.

 

[Dolly Llama]

there's a couple other things i can think of

Maybe, their wives work "real" jobs, and pay in more than enough and they file a joint return

or maybe they don't make squat and qualify for earned income credit.
Then the gub'mint actually does "give" you money.

well, it not "their" money, it's some tax PAYER'S money they "give away"


..L.T.A.

 

[Jim Williams]

Those are some possibilities Larry. I always giggle inside when I hear someone brag about getting a HUGE refund. That just means they let the government borrow thier hard earned money tax free.

 

[Steve in Omaha]

Anybody that is getting several thousand back is probably and idiot for reasons explained above. Don't think I would boast about that!

Have you incorporated yet? There can be huge tax advantages, talk to a cpa.

 

[diamond brian]

It's simple. They aren't making $ or they declare they're not making $. A new biz can get away with this for a couple of years. The IRS is just like the mafia--all they want is a piece of the action.

 

[Scott]

Chris - have you asked your accountant to sit you down and explain how much you owe and how much you paid? It's best to figure out a tax strategy a good year in advance of the closing fiscal year. Jan/Feb would be a good time to plan for the coming year, if you haven't started already. If you can get a couple of years ahead on tax planning, all the better!

Scott

 

[breathe72]

thanx scott

thanx guys

 

[Steve in Omaha]

Steve,

I find that most of the guys here will give you good answers...fast! Must have missed the threads with all the bs answers. Even here a 5:1 ratio sounds high, any examples?

 

[Greenie]

5:1 ain't bad.
you can read on ICS for days to find a gem, here they are in every 5th shovel.

THe guys are just pointing out you shouldn't be taking any further advise from "those guys".