Tax Info

[ship]

By the way, Don't know how many of you knew but tools and professional readings amongst many other things you buy throught the year are deductable.

+1,100 worth of tools this year and +380.00 worth of books means deduction. This in addition to other deductions such as if you bought a computer that gets used for business purposes - last year's deduction. Possibly also travel etc. expenses.

The 1040EZ is not set up for such things, nor is doing it yourself these days sufficient to square away what someone that has to spend money to make money professionally fairly compensate that expense. If a starting pro in the industry (student don't know about) what you buy by way of professional readings and or tools is deductable. Took a lot of years of tools bought but not deducted and loosing money in taking the simple easy to do deductions to figure this out. More frequently than not I owed money every year while struggling to put bread on my table - something wrong with that concept. A tax professional is not cheap but often very useful in at least helping you negotiate a system that is against the person that works hard but does not make an income sufficient to pay for tax havens, nor sufficient to find where to itemize one's deficits and needs as a professional..

Beyond computer programs, I would urdge those that are out of school and starting off in their careers to get professional help even if you have to pay for it in loosing a bit of what you realistiacally owe. It will save you money in the long run. This plus mortgauge on your house if you bought one.

Save your recipts... a 2" chip brush if not considered at $0.98 disposible is tax credit for tool if used for business purposes. Sand paper on the other hand not so much so as a type of thing to determine and highlight amongst your recipts.

 

[Logos]

And for those of us in Australia.
If you have an ABN and trade as a sole trader much the same applies. It is worth consulting a tax person though and I don't mean ITP or their ilk.
If you are a PAYG employee you can certainly go the more difficult route as well. Professional deductions are possible through that. I suspect that even the donation to Control booth could be successfully argued to be a valuable business and professional development deduction.

 

[Hughesie]

i really should donate i spend most of my life here

 

[SHARYNF]

This is is a bit more complicated than people are likely to see at first glance.

IF you have a large number of documentated deductions AND the total for your non reinbursed business expense is greater than 2 percent of your adjusted gross income, Then it might be worth comparing and checking to see if this makes sense, Many times expecially young people starting out may not have enough itimized deductions and income to make filing 1040 schedule a and find that the standard deductions work better. A good accountant will look at calculating it both ways and see which pays the lowest tax

Sharyn

 

[Chris15]

And in Australia, accountant's fees are tax deductible also...

 

[bdesmond]

Along the same token, the IRS considers digital copies of receipts legit. I save all the ones for anything I can potentially write off and then at the end of the month when I balance the books, I run all the receipts through my scanner and then Quicken allows you to attach PDFs to entries in the ledger. I attach the PDF scans and then throw the receipts out.

This is also useful if I ever need to reference a copy for a warranty claim or something.

 

[superdoo]

oh taxes.... They ah... Suck, I think is the appropriate term!

 

[themuzicman]

Is it just computers/books/tools used for business, or do things purchased for education count as well?
Thanks for the valuable info!

 

[mnfreelancer]

Last year I had a "regular" job doing IT work and thus my taxes were fairly simple and I filed long ago. This coming year will be a little different as I am freelancing and operating as a sole proprietor. Thus I am keeping my records VERY organized for tax purposes. I have spreadsheets for work expenses, paychecks and reimbursable expenses by client. I also keep EVERY receipt organized by month in one of those little 12 pocket expanding files. This way in the event of an audit I can put a finger right on the receipt in question. Getting organized early on in the year will make your life easier later.