NYNistler

Tax Deductions for a Family Business

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Yes you can depreciate both a new truck , make sure it exceeds the required GVWR , used to be 6000lb IIRC and fund SEP . 
Look  up the Schedule C Profit Loss for business for ideas on deductible expenses and absolutely use a tax accountant.


 

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17 hours ago, NYNistler said:

Year one, probably around $50k, with increasing profits each year thereafter.  I'm sure the pickup would make a big dent, but it also needs to be depreciated, from what I understand. It's not something you can claim a 100% deduction in one year.

If the commercial vehicle is over 7,000 GVW, you can write off the purchase price in one chunk , for now. Fuel , insurance, repairs and maintenance costs are also deductible. Don’t overlook the home office potential and R&W. Health insurance premiums are deductible   We file a schedule C , works better for our business than an S corp Consult your accountant!!! 

Edited by pakalolo

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20 hours ago, MikeMc said:

You should consult a tax advisor. 

this

 

But that said, you may be able to establish a SEP IRA where you can put 25% or 57k...whichever comes first.  What you do for yourself, you must do for all employees on a percentage basis...so if just you and your wife, not an issue.  Again, you need to talk to a tax adviser

 

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20 hours ago, NYNistler said:

If that were to work, that takes care of year one, but it wouldn't provide a long-term advantage to our tax situation, which is why I'm wondering about contributions to a retirement account. Contributions to a retirement accout also seems like it would be easier to control our adjusted gross income and ensure we don't hit the next tax bracket.

 

20 hours ago, MikeMc said:

You should consult a tax advisor. 

 

^^^ Correct.

 

14 hours ago, Chunkah said:

Yup. I have had an S Corp for 27 years and couldn't function without my accountant. With her I have made it through IRS audits because she makes sure I am doing things right. Well worth the expense. And it's a write off!

 

 

^^^ Absolutely. 

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8 hours ago, pakalolo said:

If the commercial vehicle is over 7,000 GVW, you can write off the purchase price in one chunk , for now. Fuel , insurance, repairs and maintenance costs are also deductible. Don’t overlook the home office potential and R&W. Health insurance premiums are deductible   We file a schedule C , works better for our business than an S corp Consult your accountant!!! 

Watch the home office deduction because when you sell your house those deductions become capital gains!!!

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55 mins ago, msrief said:

Watch the home office deduction because when you sell your house those deductions become capital gains!!!

No they don’t, they become ordinary income.

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Anything that could be a legitimate business deduction..

cell phones

internet access

vehicles or a portion of your miles

equipment purchases (computers, printers, chargers, paper, etc)

website related expenses if you have one

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2 hours ago, msrief said:

Watch the home office deduction because when you sell your house those deductions become capital gains!!!

Not if you stop taking the deduction 3 years prior to selling , last I heard. 

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1 hour ago, Markushook said:

Not sure what you mean here.

Under IRS rules, absent an election a one person llc is treated as a sole proprietorship and a two person llc is treated as a partnership.

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22 mins ago, MakoMike said:

Under IRS rules, absent an election a one person llc is treated as a sole proprietorship and a two person llc is treated as a partnership.

 

Yep.

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2 hours ago, EricJ said:

Anything that could be a legitimate business deduction..

cell phones

internet access

vehicles or a portion of your miles

equipment purchases (computers, printers, chargers, paper, etc)

website related expenses if you have one

 

And EVERYTHING is gray ;)

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