I started a t-shirt business online, www.originaletees.com last year. I am trying to figure out how I should file my taxes. I have a day job that I basically made about 30K. I have about 15K that is considered my business write offs (almost all on business credit cards) and I only made like $450 gross. My question is should I use my write offs now or can I save them for later? If I choose to use them now will they make my refund bigger? How does that work? Does it bring me down to an income of 15K? What's a rough ballpark of what I would be getting back? Please don't give me advice if you don't have training in this and know what you are doing. Thanks for taking the time to read this.
2007-04-04 07:06:20 · 4 answers · asked by originale_tees 2 in Business & Finance ➔ Taxes ➔ United States
You have to claim income and expenses in the year that you incurred them. It looks like you should be filing a Schedule C on your personal income tax return. On this form you will put you income and expenses. The difference between those will either be a loss or income. If you have positive income it will be subject to your regular income tax rate as well as Self-Employment Taxes. The more deductions you have, the lower your income on the Schedule C and the less tax liability you will owe. If this is the only income you have you may consider doing estimated tax payments so that you are not penalized for underpayment of taxes (that is a penalty for not paying anything in) and so that you dont get socked at the end of the year with a large balance due. You may want to consider having an accountant talk to you about your tax situation and possibly some sort of bookkeeping for your business if you continue to grow.
2007-04-04 07:17:53 · answer #1 · answered by amy 2 · 1⤊ 1⤋
How do you figure $15k in business "write-offs" and $450 in gross receipts?
I'll assume that these are your startup costs. Startup costs are usually capitalized and amortized over a 5 year period. You can expense up to $5k in the first year if you wish.
File schedule C to claim the income and legitimate business expenses.
2007-04-04 07:13:56 · answer #2 · answered by Bostonian In MO 7 · 2⤊ 1⤋
i too do a sole proprietorship and i think you have to write them off the year you produced the income because if not (from what i'm told) the IRS will place "late fees" on the money you own them..
2007-04-04 07:10:58 · answer #3 · answered by antivinegar 2 · 0⤊ 2⤋
Your expenses can' t exceed your gross for tax purposes. As to using those expenses in another tax year, I think you'd have to consult a tax professional. It may vary with the expense.
2007-04-04 07:10:47 · answer #4 · answered by Mark G 4 · 0⤊ 3⤋