Which bank transactions must be reported to the Feds? - Page 2 - TigerDroppings.com

Posted byMessage
NaturalBeam
LSU Fan
Member since Sep 2007
13113 posts

re: Which bank transactions must be reported to the Feds?


quote:

(before I started my own business and became self employed)
What's your strategy on business deductions? Balls to the wall?

And what % of business expenses to income (1099 & self-employment incomes) do you think raises a red flag? 20%? 30%?






Back to top
Vols&Shaft83
Tennessee Fan
Member since Dec 2012
14742 posts

re: Which bank transactions must be reported to the Feds?


quote:

Not gonna start a new thread, and not trying to hijack, but I worry about the IRS every single year I file my taxes. I use TurboTax, the wife and I make a little less than $100k a year, but I still worry. I get the audit protection that Turbo Tax offers. The past few years we have had a rental property, but other than that, nothing out of the ordinary.

My question(s), with the small amount of money we make, are we really "targeted" or are they after bigger fish?

If I was somehow in the wrong, do they give you a chance to pay the difference? Or is it straight to prison?

I know, probably stupid questions but I am a worry wart.



If you're wrong, they'll send you a bill. If you owe less than $25,000.00, than you can set up an installment agreement without having to go through a financial statement (trust me, I've had to do it, it's excruciating). However, the worst thing you can do is ignore them, even if you don't owe much or can't pay. If you ignore them, they can proceed with wage garnishments, liens, levies, and in some cases, yes prison.


Yes there are "bigger fish", but they do enjoy making examples of people, so don't risk it.






Back to top
OnTheBrink
Alabama Fan
TN
Member since Mar 2012
3742 posts

re: Which bank transactions must be reported to the Feds?


quote:

Vols&Shaft83


Good info! If I ever owed anything, it would be considerably less than $25,000, I would imagine. Sucks that it happened to you.






Back to top
Vols&Shaft83
Tennessee Fan
Member since Dec 2012
14742 posts

re: Which bank transactions must be reported to the Feds?


quote:

What's your strategy on business deductions? Balls to the wall?

And what % of business expenses to income (1099 & self-employment incomes) do you think raises a red flag? 20%? 30%?



Take every possible deduction you can, if it's not allowed, they will let you know. Best to meet with a good accountant, I cannot stress this enough. A qualified EA CPA is gonna keep you legal and will save you much more than they charge in fees. Been 1099/ Self employed for 10 years, certain things are flagged, such as home office deductions. But if you can prove you use a certain amount of square footage for business, you're golden pony boy.

Deduct every mile you drive for business, this deduction alone reduced my taxable income by $15,000 last year, HUGE. Keep a drive log though.






Back to top
Vols&Shaft83
Tennessee Fan
Member since Dec 2012
14742 posts

re: Which bank transactions must be reported to the Feds?


quote:

Good info! If I ever owed anything, it would be considerably less than $25,000, I would imagine. Sucks that it happened to you.




It sucks, but it was my fault, I was very stupid in my early 20s. Learned a valuable lesson and my experience can benefit others.






Back to top
  Replies (0)
NaturalBeam
LSU Fan
Member since Sep 2007
13113 posts

re: Which bank transactions must be reported to the Feds?


Thanks - I hired a new CPA this year for just that reason. He's willing to bend some things a bit more than my old CPA cared to.

Regarding the car, my business miles are not that much (<1000 last year), so someone advised me to lease my car to my business for $500/month - while I then can't write off mileage, that's $6k a year of lease expenses, plus all gas and all oil changes, maintenance, etc. So we're going to give that a shot this year



This post was edited on 1/8 at 12:25 pm


Back to top
foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
30036 posts

re: Which bank transactions must be reported to the Feds?


quote:

they do enjoy making examples of people, so don't risk it.


Plus they know smaller fish rarely document what is needed.






Back to top
  Replies (0)
Vols&Shaft83
Tennessee Fan
Member since Dec 2012
14742 posts

re: Which bank transactions must be reported to the Feds?


quote:

Thanks - I hired a new CPA this year for just that reason. He's willing to bend some things a bit more than my old CPA cared to.

Regarding the car, my business miles are not that much (<1000 last year), so someone advised me to lease my car to my business for $500/month - while I then can't write off mileage, that's $6k a year of lease expenses, plus all gas and all oil changes, maintenance, etc. So we're going to give that a shot this year



Sounds like a good idea if you need a car, if you don't need the car, I wouldn't spend the $6K + maintenance,etc to save $1K in taxes. That made sense in my head, not sure I worded it properly though






Back to top
saderade
New Orleans Saints Fan
America's City
Member since Jul 2005
21125 posts
 Online 

re: Which bank transactions must be reported to the Feds?


quote:

Any cash or cash equivalent transaction exceeding $10,000 or any transaction(s) the bank classifies as unusual in nature or not customary by that customer
Shit, I just deposited two large checks from family members that will probably throw up a red flag. About one week apart from each other.






Back to top
LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
81729 posts

re: Which bank transactions must be reported to the Feds?


quote:

What's your strategy on business deductions? Balls to the wall?

No. I only deduct what I have receipts for and can prove I use in my business.

I have a service (consulting) business so there are no "cost of goods" type expenses and most of my direct expenses are reimbursed to me by my clients, such as airfare, meals while traveling and hotel expenses. So my deductible expenses usually average much less than 5% of my revenue.

My biggest deductible business "expense" is my annual contribution to my SEP.

quote:

And what % of business expenses to income (1099 & self-employment incomes) do you think raises a red flag? 20%? 30%?

I have no idea. Sorry. Maybe Poodlebrain can help you with that question.






Back to top
Vols&Shaft83
Tennessee Fan
Member since Dec 2012
14742 posts

re: Which bank transactions must be reported to the Feds?


quote:

Shit, I just deposited two large checks from family members that will probably throw up a red flag. About one week apart from each other.



Over $10K each? If it's a gift it's not taxable until $13,000 I think.






Back to top
Vols&Shaft83
Tennessee Fan
Member since Dec 2012
14742 posts

re: Which bank transactions must be reported to the Feds?


quote:



No. I only deduct what I have receipts for and can prove I use in my business.

My biggest deductible business "expense" is my annual contribution to my SEP.



Yes, keep receipts. Forgot to mention that.

Can't wait till my SEP contribution is larger than my mileage deduction, lol.



This post was edited on 1/8 at 12:59 pm


Back to top
  Replies (0)
LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
81729 posts

re: Which bank transactions must be reported to the Feds?


quote:

If it's a gift it's not taxable until $13,000 I think.

$14,000 starting this year, 2013.






Back to top
  Replies (0)
NaturalBeam
LSU Fan
Member since Sep 2007
13113 posts

re: Which bank transactions must be reported to the Feds?


quote:

Sounds like a good idea if you need a car, if you don't need the car, I wouldn't spend the $6K + maintenance,etc to save $1K in taxes
Right - what I meant was that it is "my" car and already paid for. But instead of writing off mileage, I'll just lease my own car to my business, thus deducting my "lease payment" along with gas and maintenance.






Back to top
saderade
New Orleans Saints Fan
America's City
Member since Jul 2005
21125 posts
 Online 

re: Which bank transactions must be reported to the Feds?


quote:

Over $10K each? If it's a gift it's not taxable until $13,000 I think.
Everything I read stated that the person giving the money has to claim if they give over that amount. The one receiving it doesn't have to claim anything






Back to top
Vols&Shaft83
Tennessee Fan
Member since Dec 2012
14742 posts

re: Which bank transactions must be reported to the Feds?


You may be right, unfortunately I've never had this problem going either way.





Back to top
  Replies (0)
simonizer
LSU Fan
no
Member since Oct 2008
1089 posts

re: Which bank transactions must be reported to the Feds?


quote:

Right - what I meant was that it is "my" car and already paid for. But instead of writing off mileage, I'll just lease my own car to my business, thus deducting my "lease payment" along with gas and maintenance.



this doesn't really accomplish anything. you would have lease income = to lease expense.






Back to top
jso0003
Auburn Fan
Birmingham/Atlanta
Member since Jun 2009
4857 posts

re: Which bank transactions must be reported to the Feds?


Also it is worth noting that "structuring" transactions to avoid CTR (Currency Transaction Reporting) can be illegal by itself so don't think you can just start making a bunch of $9000 dollar deposits in cash to avoid taking the time to fill out the reports even if everything else is legally above board.





Back to top
Blastoise
New Orleans Pelicans Fan
Pallet Town
Member since Feb 2010
1481 posts

re: Which bank transactions must be reported to the Feds?


I work at a bank, I may be able to shed some light on this.


Anytime we take in or give out over $10,000 we must fill out a CTR- "Currency Transaction Report". In this report we send (presumably to the feds) your name, address, SS#, the amount deposited/withdrawn, which accounts were affected, and if any negotiable instruments were purchased.
We are instructed to ask the customer their occupation, SS#, and make a copy of a valid ID.

There are several customers who regularly make large deposits/withdrawals over $10,000 and we have pre-filled CTRs on hand for them- churches, grocery stores, etc.

We have a few customers who try to avoid having CTRs filed on them at all costs. They regularly deposit or withdraw $10,000 or less. Be wary of this, however. If there is a pattern of what appears to be avoiding a CTR, financial intelligence will call the bank up and inquire about you. If they deem it necessary they will forward your information to the Feds.

I've had to speak to several IRS agents about customers in my two years at the bank. If we believe a customer is avoiding a CTR we are encouraged to fill out a SAR- Suspicious Activity Report. This likely is communicated to the Feds, not sure though.

I don't blame people for avoiding CTRs, have never filled a SAR, and think its ridiculous what lenghts we have to go to in order to intrude in people's financial affairs. Just giving everyone some more information.






Back to top
  Replies (0)
MOT
LSU Fan
Member since Jul 2006
12963 posts

re: Which bank transactions must be reported to the Feds?


quote:

Shit, I just deposited two large checks from family members that will probably throw up a red flag. About one week apart from each other.

It wasn't automatically reported in a CTR if it wasn't a cash transaction. They probably placed a hold on the funds if it was large enough and out of the ordinary for you, but I doubt they completed a SAR just based on the fact you deposited some large checks.






Back to top
  Replies (0)


Back to top