HELP! Tax Problem...

[Guest060812]

Just hope those commie bastards at the IRS never do come after you, cause I can say from experience it ain't fun

[TexTushHog]

1. Make sure that you've paid all the taxes that you owe and no more. Make sure the you've correctly declared all your income. They way to do this is to take your tax return, and whatever system you use to keep your books, to an accountant. Explain your situation to the accountant and ask that he (or she) look over your return.

2. After that, just buy the car with a check like anybody else.

3. Form a relationship with the accountant so you feel free to make a call or two to him during the year to ask pertinent questions. He may also be able to give you good advice about saving money, which you also need to start doing as soon as possible.

[w900l]

Originally Posted by omaha2dallas

Just hope those commie bastards at the IRS never do come after you, cause I can say from experience it ain't fun

I have had the same UNfun experience also with the IRS.

And Miss Jade be sure the accountant you get is a CPA, I used a plain old accountant my first time when I started my business, it cost me a lot of money in interest and penaltys plus three audits in 5 years and you sure as hell don't want to go though several of them.

[Playful Jade]

Thanks everyone for the wonderful advide... (taking a deep breath) Ive learned so much.. Glad your all here to help..

Now does anyone know a good accountant? Ill do some research of my own too... ;-)

[Bestman200600]

You should always file a tax return because it starts the running of the statute of limitations. What you report is up to you. Whether what you receive is "massage" income or support from a good friend is up to you. Providers have many expenses, rent, utilities, advertising, hair and makeup expenses and other items that would be deductible. If you drive a 90K car and don't file a tax return you are asking for a problem.

[Truckertom]

This is Texas so you also need a sales and use tax permit and you are supposed to charge sales tax based on the location that the service is performed in.

[jimbo]

Originally Posted by Precision45

You could always form an LLC (Limited Liability Company) and pay taxes that way. Form an entertainment company in your name, report and pay on your earnings. Hell it's legit, costs only a couple hundred buck to form and is SIMPLE to do.

Even if you are a cash-only business it will work.

Even better, form a S corp. figure out what sales you will make a year and pay yourself a salary thats about 50% of it. that way you will only have to pay SS taxes on 50%. the rest after deducting expenses flows to your personal tax's without SS taxes.

[TexTushHog]

Originally Posted by jimbo

Even better, form a S corp. figure out what sales you will make a year and pay yourself a salary thats about 50% of it. that way you will only have to pay SS taxes on 50%. the rest after deducting expenses flows to your personal tax's without SS taxes.

Maybe I missed something, but won't you have to pay the other half through the S Corp? If not, I'm missing a trick when I pay my employers half on my wages through my S Corp.

[esteban0415]

yes, but isnt he saying "that way you will only have to pay SS taxes on 50%"? (the 50% that he is declaring as wages, is subject to SS taxes.

the other half that is thru profits will flow thru his personal, but it will not be subjected to self employment tax. the issue here is whether or not the salary you declare is reasonable, so dont go too low with this amount or uncle sam will come a-knocking..

[toyrrific]

The original question had to do with trading in your car. Please call me at 214-284-6991 and I will be happy to help you.

[txcwby6]

Deposits greater than $10,000 are reported to the IRS (government believes it'll deter drug dealers who simply deposit $9,999!) but paying cash for an automobile is not a crime or reportable to the government, including the IRS. I usually will put at least $25,000 down on any car purchase, finance the remainder for about 6 months and then pay the loan balance in cash. It's still an all-cash transaction but it appears more legit when you break it up like that AND most car dealers LOVE to provide the credit.

[TexTushHog]

Originally Posted by esteban0415

yes, but isnt he saying "that way you will only have to pay SS taxes on 50%"? (the 50% that he is declaring as wages, is subject to SS taxes.

the other half that is thru profits will flow thru his personal, but it will not be subjected to self employment tax. the issue here is whether or not the salary you declare is reasonable, so dont go too low with this amount or uncle sam will come a-knocking..

Not using real rates, but let's suppose employers half is 5% and employees half is 5% and self employment tax is 10%.

$100k income. If you're self employed, you pay $10k. Easy enough.

You have a S Corp. You have $50k in profits that is self employment -- $5k in taxes. (And there are reasons not to do this, but we'll skip those.) Now pay yourself the other half of $5k. The S Corp will pay the employers share 5% = $2.5k and you pay the employees half, $2.5k. Total is S Corp pays $7.5 and you pay $2.5 = $10k.

Same either way.

I have heard of people trying to pay themselves dividends or cap gains out of an S Corp, but I'm not sure that you can justify that.

[Guest050911]

Moved to Sandbox, not directly Hobby related.

PPE