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Up Topic Welding Industry / General Welding Discussion / Tax Time
- - By DHPatton (*) Date 02-06-2011 21:03
Well it is that time of the year again. I have a person that is doing my taxes and in the past he has done them well ( I usually get a nice return after he is finished),
but that was before when I was single hand welding. Now I am running my rig and working as a contractor. I want to make sure I am getting everything that I am able and entitled to get
back from the government. Not saying my tax guy is not doing the taxes right just want to make sure I am giving him or keeping track of my deductions/ expenses like I should.
So my questions  are:
            1    "What are some of y'alls words of wisdom concerning taxes?"
            2    "What do y'all see as saving you the most money?"
            3    "Also I am going to get him to set me up either as an LLC or a corporation  what do y'all recomend?"

As always I apreciate everyone of y'all responses as they are based on many years of experience and "been there done that", so thanks in advance.
Parent - - By Cactusthewelder (*****) Date 02-06-2011 21:14
Get a Tax Person that is familier with what "WE" do.

Never look for a return of money, Write off Everything and just hope you dont have to pay much

"S" Corporation
Parent - By Rig Hand (***) Date 02-07-2011 04:45
When you set up an LLC  you chose how you would like to be taxed. You can chose a "S" corp. taxation as Cactus said and still be an LLC. The LLC just gets you out of the "monthly meeting" that you would have to hold, and record, if you were a corporation. Inc's just have a little bit more structure that you have to follow, but they hold up a lot better in court.

I choose to be a disregarded entity or basically a sole proprietor. The LLC still legally protects your personal assets, but in the eyes of uncle Sam your a sole proprietor and taxed as one. You should talk to a few accountants before you decide.

Set up a business checking account and get quick books online and use it, QBO Basic- is only $10 a month. It will surprise you how little you actually make.... If you do it right. :)
Parent - By strother (***) Date 02-06-2011 22:36
Keep every receipt . It helps to get something like quickbooks so can put your expenses in everyday. Like Cactus said make sure your accountant understands what we do. Ask lots of questions and find someone else if they are not giving you answers . I had an accountant for several yrs. that kept saying "let me handle that." I've got a new accountant this year and now I'm in the process of straightening out a big mess the first one made.
Parent - By weaver (***) Date 02-07-2011 04:31
use a debit or credit card to pay for everything (that way you don't have to keep reciepts). Anything over 12 dollars is a 100 percent right off,  Talk to your account all the time. For 2010 my account called me and I couldn't put any checks in and had to run my account down(all of nov-dec 31) Without that relationship I would be screwed. And like cactus said "s" corp.. winner winner chicken dinner!
Parent - - By Cumminsguy71 (*****) Date 02-07-2011 05:16
I've tried Quickbooks and didn't care for it, last year picked up the Sage Peachtree and really like it, takes some getting used to though. Simplifies everything as far as invoicing, billing, money in, tracking payment you make to suppliers, insurance etc., but I basically use mine for invoices, keeping track of what is coming in, jobs.

I keep all of my receipts. I have a file folder marked for the current year, pile receipts in my wallet then put them in the checkbook and file receipts in folder. I have a business account for everything I buy. Spent Saturday going thru receipts seperating truck maintenance, welder maint., diesel, welder gas, meals/travel exp., supplies etc. Stapled sticky notes on each marked what it was with the total of all receipts in that group. Now I know exactly what I spent on what, Airgas, other welding supply house I go to, steel guy, decorative steel folks and so on.

As far as diesel fuel and truck maintenance from what I've learned you have two options. (A) Write off your fuel and maintenance, i.e., oil changes, repairs or option (B) Write off your mileage. Seems with the mileage I drive it is always better to write off my mileage. I think it's something like .58 cent's per mile is what you get.

If you have a home office, your allowed to write off a certain % of that. I write off my cell phone bill, at least part of it, we have a family plan so obviously can't write all of it off. Work clothes, work boots, shirts etc., write off. Although one year I told the accountant what I spent on work clothes at the Goodwill, Thrift stores and she asked me if I had uniforms, told her ahhhhh, what?? Told her I wear cotton blue jeans, cotton shirts that I buy specifically for welding/working. She wouldn't allow it because it was not "uniform company" uniforms. Told her I spend $36 on a shirt that will get burnt, dirty, holy and whatever else that happens and she still denied me. The next year I just slid that into my expenses without specifying "uniforms".

Like Cactus said, find an accountant that if familiar with what we do. Kinda like the insurance agents, finding one that understands what we do off our trucks, what we work on.
Parent - - By weaver (***) Date 02-07-2011 05:31
HI Shawn, just reading your post. You can write off fuel ,maint, oil changes, mileage anything to do with your work truck. I have a another suv that the company bought just so i can deliver invoices. My accountant saved me about 100k last year and charges me about 2-3k. We use quickbooks and prepare everything for him. Kind regards, Shannon
Parent - By Cumminsguy71 (*****) Date 02-07-2011 05:34
I'll have to check into that because they keep telling me either or around here. Either maintenance or mileage but not both. A friend of mine has a fence company and he's been told the same thing.
Up Topic Welding Industry / General Welding Discussion / Tax Time

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