The IRS and us

[ExclamPt]

It's that time again -- tax time.

I am basically retired, but I have done some photo restorations for money in 2003. This will be the first time I've had to fill out Schedule C.

I have some questions of others how they've handled certain tax issues in this type of home-based business.

Would an exchange of information regarding taxes be a worthwhile thread in this forum?

[Mike]

There are so many variations to the tax codes, how they relate to your size of business, to the state you are in, etc, etc that I would say take it to a person who does taxes for a living and will stand behind their work.

Most of us do things with photos, why would you tnink that we are any good with taxes?

Kind of like asking us for medical advice or how to work on your cars brakes, there are some things that you should just bite the bullet on and pay to have done.

To give you an example, many years ago when I was just starting out, I did my taxes for the first three years, then on the fourth, I owed several thousands of $ (which were not in my account). Finally went to the expert, paid her the bucks, and went home enjoying not only a very healthy refund for that year, but she redid the previous 3 years and that bought me a lot of very nice equipment.

Just my 2 cents worth

Mike

[ExclamPt]

Mike,

You have some valid points, but I'm in a time crunch. I need to complete my taxes by March 1 in order to fill out my son's FAFSA (student aid) application. I may not be able to get an appointment to see my CPA before then.

And yes, state tax regulations differ, but federal IRS regulations do not. I suspect there are many here who have similar "home business" arrangements which are almost cookie cutter.

As an example, my one question to the forum at large is this: "Do you report your stock of paper/ink/envelopes/etc. as 'inventory' or does this only apply to true manufacturing businesses and not business which are basically service?"

Mike, I'm glad you were able to save so much money by having a tax professional do your taxes. But usually, tax questions are black and white to the extent that Intuit and others can write programs to do them.

By sharing information here, we could get contributions such as "well, here is my situation, and my tax professional said..."

My original post was just a trial balloon.

[Noelf]

Originally Posted by ExclamPt

As an example, my one question to the forum at large is this: "Do you report your stock of paper/ink/envelopes/etc. as 'inventory' or does this only apply to true manufacturing businesses and not business which are basically service?"

I personally don't consider my stock of paper and ink inventory. They are considered supplies (a business expense) on my taxes.

Being a service professional, I stay away from the concept of inventory as hard as possible. The IRS has some strange ideas on inventories

I don't think you would have any problems considering your paper and ink as just a business expense.

- Noel