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Tim Friday Elite user 485 Posts |
I met with my accountant this past week and had some questions answered about what is allowed to be deducted. Here are some of the points I learned you might be interested in or discussing:
-Meals: only 50% of the cost of meals are allowed to be deducted. This is because a meal could possibly be considered personal by the IRS. Unless it is specifically for business and the purpose and people present are documented, a meal is only 50% deductible. For this reason, meals might not be the best choice for an expense. -Auto expenses: when you purchase a new vehicle you must decide one of two routes - expense maintenance on a case by case basis or expense mileage. In my case because I drive a used car that is paid for and do not lease, and because I spend a lot of time on the road, it is better to count mileage. IRS allows $0.575 per mile. These two points helped me readjust what I am deducting. I had been counting a lot of meals. For example, a meal while traveling to a gig or after a gig, but I will most likely delete these. I had bought new tires for my car and had been counting some gasoline purchases, but I deleted these and put it in as mileage instead. |
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Dannydoyle Eternal Order 21219 Posts |
This is why any time anyone asks questions like this on the Café' I ALWAYS say ask a professional accountant. What urban legend says you can/should deduct vs what reality says are generally 2 very different things.
People think I am being mean by suggesting such a thing. But the fact is that it is WAY less expensive to find a guy to have it done right than to pay the penalty for being wrong. Also generally having an accountant that will take an audit with you is far better than "Some guy on an online message board who thinks he knows everything even though he never has done anything said I should".
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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Tim Friday Elite user 485 Posts |
One other concept I learned is the option of having an SS4 number.
An SS4 number is something you register with the IRS and will give you a taxable ID number for your business. The advantages to this are: 1) You can open a bank account with your SS4 number 2) You can have a check written to your business name (or in my case stage name) 3) You can put your SS4 number on a W-9 in place of your social security number, this is a major benefit because it will help prevent ID theft (certain clients request a W-9 so they can cut you a check from their company) |
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TomBoleware Inner circle Hattiesburg, Ms 3163 Posts |
Tim, the SS4 is just the form you use to apply for a Federal Tax ID number.
It’s called an EIN number (Employer Identification Number) And you right, it sort of replaces the social security number. But it will only be issued to a legal business, individuals must still use Social Security numbers. Tom
The Daycare Magician Book
https://www.vanishingincmagic.com/amazekids/the-daycare-magician/ My Blog - https://boleware.blogspot.com/ |
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Mindpro Eternal Order 10586 Posts |
As I always say, be careful who you listen to, and secondly make sure the person you are listening to and YOU have the proper understanding of the information. Your last two posts offer some partially correct information and some incorrect information. You should't be sharing something until you know who you've listen to has the proper knowledge and/or you have the proper understanding.
Your information about meals in partially correct but not quite as such a blanket statement as you've presented. Also the SS4 is incorrect as you have explained. The SS4 is an APPLICATION FORM to obtain an EIN. It is the EIN that can allow some of the things you've eluded to, plus more depending on the situation and circumstances. The same is true for most of the other info you've provided, it is and can be applied differently in different situations and circumstances. Write-offs can vary from performer to performer and type of performer to type of performer. While one performer may be able to write off something another performer may not. As Danny says it exactly this type of information that spreads inaccuracies and misinformation on a public forum, that is not necessarily true or the complete story. Again, be careful who you are listening to and what you are stating as fact. |
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Dannydoyle Eternal Order 21219 Posts |
This is why many go with an LLC and an EIN.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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TomBoleware Inner circle Hattiesburg, Ms 3163 Posts |
Tim, I have 40 plus years of business experience. I have done accounting and tax work for others and I have set up and run dozens
of business of my own. The most important words you will ever here about business is this: Don’t listen to those that tell you to completely turn your business matters such as taxes/accounting/banking over to someone else and to forget it. You still need to learn all you can on your own about taxes, etc. Certainly you can’t become an expert in every aspect of the business, but you do need to learn the basics and more. Don’t be afraid to ask questions everywhere, and don’t be afraid to check the work of the experts. They work for you, you don’t work for them. Keep learning as you go. Tom
The Daycare Magician Book
https://www.vanishingincmagic.com/amazekids/the-daycare-magician/ My Blog - https://boleware.blogspot.com/ |
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Dannydoyle Eternal Order 21219 Posts |
Did anyone say turn anything over to anyone?
Knowing what you don't know is important. Knowing when it is more efficient to use people like an accountant or lawyer as opposed to just thinking you know is important. Also these lessons ate quite expensive to learn without the right people. Setting up your business wrong cam hurt you later. Getting advice from someone who specializes in that sorry odd thing is just common sense. Admittedly not add conning add it should be. As you grow the mistakes compound if you keep doing them thinking you know. This is why it was great you sought advice from a professional. Good for you. Nobody said don't learn and nobody said forget it once turned over. If you don't tend to every aspect of your business especially as you start it is a mistake. You are doing it perfect I think.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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Tim Friday Elite user 485 Posts |
I might not have gotten the wording exactly the same as my accountant explained it but hopefully I have the general concept. He said decide if I want to LLC before doing the SS4 form. I'm not so sure I need an LLC and am holding off on that and the SS4 for now.
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Mindpro Eternal Order 10586 Posts |
Quote:
On Jun 20, 2015, Tim Friday wrote: All of the "advantages" you listed are also available to many entertainers as well without having or using an EIN number. The things you mentioned can still also be done just using your own social security number. |
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Dynamike Eternal Order FullTimer 24148 Posts |
LLCs, (limited liability companies,) are used often by small business owners to protect their assets and keep their businesses separate from their personal financial lives. Traditionally, LLCs have been used by businesses: Entrepreneurial ventures, real estate development companies, and hedge funds are just a few of the types of businesses that use LLCs in order to protect the owner’s assets should the business get sued, among other reasons, such as tax advantages.
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Dannydoyle Eternal Order 21219 Posts |
Where did you cut and paste that from?
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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Mindpro Eternal Order 10586 Posts |
Hilarious! I thought the same exact thing
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Dynamike Eternal Order FullTimer 24148 Posts |
A good magician never reveals his secrets to the opposing team.
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BrianMillerMagic Inner circle CT 2050 Posts |
It's from here: http://money.usnews.com/money/blogs/alpha-consumer/2011/10/27/do-you-need-to-form-an-llc-
Mike, you could have linked to that article for the benefit of members learning valuable information. |
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Tim Friday Elite user 485 Posts |
I share more context:
I asked my accountant about getting a DBA bank account so I could then accept checks written to the Tim Friday name (it is a stage name). That is when he showed me the SS4 form. He said that if I want to do an LLC then I should do that before I do the SS4. He said an LLC costs between $550 to $750/year and for that price it is a great deal. He said I would need to meet with an attorney to get it set up. I'm not so sure I need an LLC, but maybe just liability insurance instead. |
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Dannydoyle Eternal Order 21219 Posts |
Quote:
On Jun 21, 2015, BrianMillerMagic wrote: And to avoid the little legal misunderstandings that go with appropriating others written material and passing them off as your own thoughts.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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Dannydoyle Eternal Order 21219 Posts |
Quote:
On Jun 21, 2015, Tim Friday wrote: Wow really? Well an LLC can in many if not most states be set up online. In Missouri it costs quite little and in Nevada. Each state is quite different. The protection an LLC gives you goes WAY beyond what an insurance policy will. It separates and protects you from LEGAL consequences of running a business. The problem is you are giving us partial bits of information that and in reality you are not using the right terms. It is very confusing. Also incidentally you will STILL need liability insurance even with an LLC.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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Dannydoyle Eternal Order 21219 Posts |
Quote:
On Jun 21, 2015, Dynamike wrote: You get so worried with who is on your imaginary team that you hurt others. It is about helping. It is not about your personal vendettas or ego.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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TomBoleware Inner circle Hattiesburg, Ms 3163 Posts |
Don’t let anybody fool you, it is very hard, as in impossible, to shield yourself from lawsuits etc, with ANY
type of business set up when there is a sole owner. Now things are a little different if you have partners, form a corporation, etc, but a small business with a single owner will do about as well going with a simple basic set up. You can’t hide from lawsuits, so yes you do need liability insurance from the get go. You can even have clients sign waivers releasing you from all reasonability and they can still sue you. A good attorney will prove it was your fault and then it is all over, the signed papers didn’t help. While signed papers are a good bluff at times, they really mean nothing when the other side has good lawyers. Your only real protection is insurance. Your insurance company will fight for you with their lawyers. Tom PS. Go Team Go.
The Daycare Magician Book
https://www.vanishingincmagic.com/amazekids/the-daycare-magician/ My Blog - https://boleware.blogspot.com/ |
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