Startup Expenses And Tax Writeoffs?
I am in the beginning phases of starting up a real-estate Buy-Fix-Sell operation focusing on restoring a particular community. This will be in addition to my day-job. In order to be more productive I will need a phone line to my house (I currently only have a cellphone), fax machine, some construction tools, and possibly even a truck since my current vehicle is not suited for hauling tools, materials, etc. What, if anything, can I write off on my taxes as "business expense" without being unethical?
Also, any ideas on how much it costs to set up a LLC? One place wants to charge me $1100 up front and $10/mo after that (their services include setting up the LLC and doing my personal and corporate taxes)--am I crazy to think that is a lot?
I appreciate your wisdom,
Lee
You can write off anything that you reasonably need to conduct business. If you are using it to do your business and you wouldn't have bought it otherwise, you can be pretty confident that it is a good expense.
There are different schedules between what can be written off today, and what would need to be written off over time. your tax advisor will give you the specifics on each item that you buy.
As for the cost of the LLC. If they are any good at what they do, $1100 is nothing. I pay more than that just to have my corporate taxes done, and it doesn't include ANYTHING else. BUT, they better be good. Never be afraid to pay the professionals alot of money, just be sure they are making you more than they cost.
It is true that you must pay good professionals. They are worth it and they offer a lot of insurance. That said, I researched what was required by my state and what was smart for my business. Then I reseached who could give me what I wanted and at what cost. I found what I needed for $300 and a yearly fee for the registered agent of $125. I was set up fully in three weeks. I also have a CPA that I pay generousely at the end of the year.
Asland,
you can incorporate online at places like www.smallbiz.com and then just have an accountant do your taxes yearly and give you advice, that might help you keep your costs down at first.
Best,
Susana
Quote:
On 2004-02-17 08:14, aslan wrote:
I am in the beginning phases of starting up a real-estate Buy-Fix-Sell operation focusing on restoring a particular community. This will be in addition to my day-job. In order to be more productive I will need a phone line to my house (I currently only have a cellphone), fax machine, some construction tools, and possibly even a truck since my current vehicle is not suited for hauling tools, materials, etc. What, if anything, can I write off on my taxes as "business expense" without being unethical?
Also, any ideas on how much it costs to set up a LLC? One place wants to charge me $1100 up front and $10/mo after that (their services include setting up the LLC and doing my personal and corporate taxes)--am I crazy to think that is a lot?
I appreciate your wisdom,
Lee
all of the above is good advise. I would get registered with D & B right away. I also cut costs on phone lines by using a system with AT&T, I have an 800 number but I can pick up that line on any phone. When I originally got it set up it was ten bucks (1995) now it is $31.00. But that is one less cost. I also got all the nessarary forms through 301Legal Forms & Agreements. I downloaded many forms from the state website. I just started another company in 07/11/2003. I haven't started work yet but I have had a lot of expenses. I am going to my accountant soon, I'll let you know how much I was alloowed to write offf. I did make $3500.00 last year on one deal. so I am interested to see what my taxes for this new company look like.
Lori
[addsig]
Thank you all, that is helpful.
Any preferences on whether it is better to have your tax advisor nearby as opposed to somewhere out there in cyberspace?
tinman1755, pardon my ignorance, but what is "D & B". I'm sure it will be obvious once explained.
Dun & Bradstreet, Any financing you try to get will go to them to get a report on your business.
Lori
[addsig]
Aslan, I'm local to you, and it cost just under $500 for one attorney to set up an LLC. Shop around. One attorney wanted to charge me over $1000, too.
I am in the process of setting up an LLC myself. I have looked at what is necessary and seriously think I can set it up by myself without any outside help. Am I being ridiculous with this assumption?
Like someone said above, a good rule is to only pay professionals less than what they can make you from their services. I think I would much rather save my money to pay an accountant to do my taxes than pay an attorney to set up an LLC firm. I can't see the cost-benefit of the LLC fee.
If I am way off base, would someone please enlighten me on the benefit of using an attorney to set up an LLC.
Thanks,
JS.
The reason I used an attorney is the privacy issue. It's really not hard to do at all...then again it's not hard to figure out who owns a LLC if you are the registering agent either. It's a cost/privacy tradeoff.
I am just starting out also and I formed an LLC at ****Must Reach Freshman Investor status before posting URL's*** for $329.00 including the $50.00 agent fee. This fee is the same yearly for life. Good Luck.
p.s. I can't give you the url but I incorporated in delaware.[ Edited by lucky1361 on Date 02/20/2004 ]
Go to Lowes or a OfficeMax and get generic forms for a few bucks, file with SCC (Virginia) and use a 'tax man' for tax preparation.
Hope this helps
Tokarz