Tax write offs

[American Exteriors]

My wife runs a state licensed daycare and just about everything from electricity to home improvements to toilet papar can be deducted to some degree.

My question is, what are all of the deductions I can be looking forward to in this business? To clarify, what percentage of new equipment, chemicals, vehicle etc. can be written off?


Any insight would be appreciated.

Thanks, Tim

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[Mike Hughes]

Probably a question best saved for your accountant......

 

[Craig Knight]

<FONT COLOR="Red">My question is, what are all of the deductions I can be looking forward to in this business? To clarify, what percentage of new equipment, chemicals, vehicle etc. can be written off? </FONT c>

We write off dang near everything. If equipment is less than a grand, we write it all off that year. If more, we depreciate it over expected life of piece. Chemicals, all of it. Vehicle, you can go two ways in Texas, either straight mileage or payments, gas, oil, all upkeep, etc. Insurance is separate.

If you use it for your business, honestly, then deduct it. If you don't, your missing out on the only break you'll get from the Uncle Sam.




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Craig Knight
www.powerwashunlimited.com

 

[American Exteriors]

Thanks for the input! I do fully intend to have an accountant handle my taxes at year end, but I am just trying to get an idea ahead of time as to how much I can expect to write off my gross profit. I am not looking for anyone's specific business details in terms of what you make or what your profit % is, just looking for some average numbers for estimating my particular scenario.

Craig, when you mentioned writing everything off that you honestly use in your business, I couldn't agree more. But I am wondering: say chemicals for instance - just say I spend $2,000 this year for chems.
What does uncles sam let you deduct as a percentage?

Is it 10%, 50% or maybe 100%. I don't know, maybe this depends on your accountant and what they feel you can get away with. My thoughts are, though, that Uncles Sam has very specific guidlelines that apply to all of us equally which would not make this a matter of confidentiality but rather a matter of fact that we all need to adhere to.

I also realize that equipment can be depreciated over time, either using a straightline calculation or other means, so I will work that one out with my tax advisor.


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[Douglas Hicks]

first talk to your accountant. If you don't have one, get one. then keep records on milage, fuel, repairs on vehicles. Unless you are using a pick-up or van for exclusive business use, you may be better off caliming milage, which for 2001 is .34 a mile, I think.
It is not how much you make, but what you pay taxes on.
Keep track of trips to the parts house, bank, post office, sales calls in your private vehicle. Keep all this in a notebook. If you work out of town, find out the normal deductions for food and lodging in your area. Claim the maximum allowed, even if you only eat twice a day and sleep under a tree in the park. If you can prove you were out of town overnight, you can claim the deduction. Your proof is invoices and the notes you take when you call on Current and prospective clients. Claim the home office deduction, but not the property taxes and house payment. Your accountant will tell you more about this. Some people even claim school supplies, all their tools, dinner out with friends, vacations, enertainment. I have even heard of people writing off part of hunting trips and bicycle trips. Of course nobody on this board would stoop so low. Lots of expenses are deductable if you use creative writing. Just keep good records, and a good accountant and be creative. Normal disclaimers apply, if you go to jail, don't use your nickle to call me.

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