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re: Tax question as an independent contractor
Posted on 12/28/14 at 2:07 pm to white perch
Posted on 12/28/14 at 2:07 pm to white perch
Max out IRA if you arent already.
If you are paying a CPA and he isnt doing a good job, fire his arse.
No way you should be paying 35% of your income.
Learn to buy shite. Whether you want that to be toys or investments in something like real estate or other business, never just willingly give the government that much money.
If you are paying a CPA and he isnt doing a good job, fire his arse.
No way you should be paying 35% of your income.
Learn to buy shite. Whether you want that to be toys or investments in something like real estate or other business, never just willingly give the government that much money.
2
Posted on 12/29/14 at 8:59 am to Lsujacket66
quote:35% is not an unusually high amount of tax for a self-employed individual, especially one providing personal services. The 25% tax bracket starts at $73,800 for married filing joint. Combine that with approximately 15% self-employment taxes and state income taxes, and it is pretty easy to get to a 35% effective tax rate.
No way you should be paying 35% of your income.
quote:How does this reduce taxes? Expenses are deductible if they are ordinary and necessary. How do you justify the purchase of toys as being ordinary and necessary for business purposes as opposed to personal use? Can you substantiate the business use of your toys? Are you familiar with passive activity rules that would prevent the OP from deducting losses from real estate or other businesses?
Learn to buy shite. Whether you want that to be toys or investments in something like real estate or other business, never just willingly give the government that much money.
Posted on 12/29/14 at 10:47 am to Poodlebrain
quote:
35% is not an unusually high amount of tax for a self-employed individual, especially one providing personal services. The 25% tax bracket starts at $73,800 for married filing joint. Combine that with approximately 15% self-employment taxes and state income taxes, and it is pretty easy to get to a 35% effective tax rate.
i agree that's not unusually high for a high earning individual, but there are myriad ways to reduce this as an independent contractor. the OP needs a good accountant. if you know some other independent contractors, ask them who they use. a great person to ask would be someone in the oil business - those field workers are pretty clever with their tax situations.
Posted on 12/29/14 at 11:12 am to Lsujacket66
quote:
Learn to buy shite. Whether you want that to be toys or investments in something like real estate or other business, never just willingly give the government that much money.
Yeah, this is horrible advice. Not that I would know anything about auditing, but that would be a massive red flag if someone who knew what they were doing was auditing.
Posted on 12/29/14 at 12:36 pm to lsujro
quote:
a great person to ask would be someone in the oil business - those field workers are pretty clever with their tax situations.
I am fully convinced based on experience that oil guys and ranchers (who many times are one and the same) are convinced that they should not pay a dime in taxes, and that everything is deductible.
I've lost a couple of these guys to tax prep people (note, not CPAs) who are, shall we say, willing to go along.
Most tax guys are aggressive, but some cross the line.
Posted on 12/29/14 at 1:27 pm to Poodlebrain
quote:
quote:
No way you should be paying 35% of your income.
35% is not an unusually high amount of tax for a self-employed individual, especially one providing personal services. The 25% tax bracket starts at $73,800 for married filing joint. Combine that with approximately 15% self-employment taxes and state income taxes, and it is pretty easy to get to a 35% effective tax rate.
quote:
Learn to buy shite. Whether you want that to be toys or investments in something like real estate or other business, never just willingly give the government that much money.
How does this reduce taxes? Expenses are deductible if they are ordinary and necessary. How do you justify the purchase of toys as being ordinary and necessary for business purposes as opposed to personal use? Can you substantiate the business use of your toys? Are you familiar with passive activity rules that would prevent the OP from deducting losses from real estate or other businesses?
setting up a LLC and showing investment or loss, this could include a vehicle for company use, houses, land, tractors, etc.
Posted on 12/29/14 at 2:05 pm to LSUFanHouston
quote:
I am fully convinced based on experience that oil guys and ranchers (who many times are one and the same) are convinced that they should not pay a dime in taxes, and that everything is deductible.
Nobody is as bad as many in the clergy in this department. At least in my experience as a tax preparer for a CPA firm a few years ago.
Posted on 12/29/14 at 2:25 pm to Lsujacket66
quote:I don't think you know what you are talking about. None of your suggestions will result in significant reductions in the OP's income subject to tax without causing him actual economic losses.
setting up a LLC and showing investment or loss, this could include a vehicle for company use, houses, land, tractors, etc.
Posted on 12/29/14 at 2:35 pm to Poodlebrain
quote:
I don't think you know what you are talking about. None of your suggestions will result in significant reductions in the OP's income subject to tax without causing him actual economic losses.
He probably attended one of those workshops given by an attorney from Utah who travels around giving workshops selling LLC packages, if you buy "tonight only" you can buy 5 LLCs for $1,500 or some such nonsense, and you should put every single asset you own, personal and LLC into different LLCs.
I have several veterinarian clients, and this guy spoke at their local association meeting a few months ago, and I got calls for days afterwards asking about it.
This post was edited on 12/29/14 at 2:36 pm
Posted on 12/29/14 at 11:38 pm to Lsujacket66
quote:
setting up a LLC and showing investment or loss, this could include a vehicle for company use, houses, land, tractors, etc.
This is completely and utterly incorrect. Not only are you opening yourself up to auditors asking why, in the normal course of business, you would need these things, what happens if the company goes bankrupt? Oh that's right, all those things that were expensed through your company wouldn't be protected.
Posted on 12/30/14 at 1:28 am to Jcorye1
In the Jackson area, one of the reps at Raymond James teaches an adult (no-credit) course on the Stock Market at Millsaps College. There is always a doctor or two taking the class.
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