Taxes & deductions

[soonermajic]

As most of u know, Im a HS Coach, who owns a couple washes.
What are se of the more obscure things I need to be writing off? Or, what are some good tax strategies.
We owe quite a bit, for the first time, this yr.

 

[HeyVern]

Fuel, business lunches or dinners, travel expenses to conventions and such, vehicle maintenance and depreciation, memberships to clubs or organizations used for networking and public relations. Almost anything can be a business expense, everything can be with a little creativity.

 

[soapy]

Section 179 lets you take accelerated depreciation on equipment in the year it was put into service. Last time I checked it was limited to up to a 125K per year write off. A vehicle with a GVW of over 6800 lbs can be written completely off. You shoule get with a good CPA, they won't cost you money they will save you money.

 

[traveler17]

100 percent agree w soapy. I found a CPA awhile back that’s worth the money. There are guys like him that are creative. I wanted someone who can bend the tree without breaking it

 

[soonermajic]

Section 179 lets you take accelerated depreciation on equipment in the year it was put into service. Last time I checked it was limited to up to a 125K per year write off. A vehicle with a GVW of over 6800 lbs can be written completely off. You shoule get with a good CPA, they won't cost you money they will save you money.

Can u write off your truck & mileage?
My tax guy said no, bit mileage is better. I can write off mileage since this is my 2nd job!

Also, wife found a $75,000 mistake she made
in our favor! Not sure how she missed the $90,000 deposit in 1 month!!!

 

[MC3033]

Miles you can write off to the IRS limit ($.585).

You can write off a full expense of a lease assuming the lease is fully used for business. If you are financing to own you can only deduct the interest and depreciate the principal. If you go that route you can write off other expenses as well like gas and maintenance

A good CPA will save you more then they cost you. IMO they are much cheaper then I would have thought if they are just doing tax prep.

 

[soapy]

I have a dedicated work vehicle and and dedicated personal use vehicle. You can write the mileage off on a combo vehicle as mentioned. For a fully dedicated work vehicle you can write it off directly.

 

[Rfreeman]

You should be able to write off mileage. Not only that those new IBAs you bought you can depreciate that. Also when purchasing the location if any value was assigned to the equipment vs property or land....the portion assigned to equipment you can depreciate that as well. Or at least those new vacs you purchased write those off.

Every owners situation is different but like it was already mentioned a good CPA pays for themselves many times over.

 

[Earl Weiss]

Business use of phone and internet.

 

[Car_Wash_Guy]

Like Soapy said - Find good accountant and they will save you money. Taxes aren't DIY - IMHO.

If the truck isn't a dedicated business vehicle, you should be keeping a mileage log and deducting every business related mile.

 

[Joswhaha]

This is a great topic with great advice. Of course, sec 179 is the biggest deduction but you have to use it wisely. One other item not mentioned yet, Your income from the car wash is self employment earned income and you must pay self employment tax on that income. If you setup your car wash business and property separately, you may be able to avoid that self employment tax by the car wash business paying rent to the property ownership entity. Rental income is not earned income and not subject to the same tax liabilities. Most deductions depend on your situation and future plans. In some cases you may be better off paying more tax now and saving some deductions for later, especially if you feel like tax rates are going up.

Like these guys say, a good business CPA will know how to tax plan and be worth the cost.

One possible trick to get more mileage, have a dedicated space in your home to serve as a home office. Visit your home office every morning before leaving your home, this could open up your commute to work or to the car wash as deductible expense.

 

[soonermajic]

You guys have a bunch of sharp ideas.

Question #8: we bought a houseboat. If we put pur business name on both sides of boat, & have customers on it, can we write it off? If so, what can we write off? It's mortgage, , slip rental, etc...use signahe on each side & slip rental as advertisement?

 

[MEP001]

I deduct everyday wear clothes and boots since I wear them to the car wash every day.

 

[soapy]

Spend I think 2 weeks living on your boat and it used to qualify as a second home. Check with your CPA.

 

[Earl Weiss]

I deduct everyday wear clothes and boots since I wear them to the car wash every day.

No, those are clothes that cannot be worn everyday or anywhere they are specifically suited for the Car wash .

 

[Joswhaha]

You guys have a bunch of sharp ideas.

Question #8: we bought a houseboat. If we put pur business name on both sides of boat, & have customers on it, can we write it off? If so, what can we write off? It's mortgage, , slip rental, etc...use signahe on each side & slip rental as advertisement?

I’m not a tax expert but have survived a few irs audits. Generally they say the expenses must be ordinary and necessary to your business to be deductible. I had questioned my CPA about similar deductions and his opinion was if I put an advertisement on a boat, the cost of the advertisement could possibly be deductible. However, the other boat expenses would not be unless I was somehow using the boat for the business.

There is another possible situation where a portion of your boat expenses could possibly be deductible. If you would also use the houseboat as a short term rental in the times you weren’t using it. That would convert the boat to a business and the portion of the expenses for the time you were actually renting it or offering it for rent could be normal business expenses, also you may actually make a little money.

 

[MEP001]

No, those are clothes that cannot be worn everyday or anywhere they are specifically suited for the Car wash .

Then I guess only my boots qualify.

 

[eckert16]

Don't hesitate to get a good CPA ... and a lawyer to assist with company/LLC/Sole Proprietor decisions which have tax and legal implications ... many times you'll want to set up meetings with them together for planning purposes ( a tax decision may open you up to legal liablity...vice-versa- which is why you want at least yearly meetings together ).

Please don't interpret this as meaning a quick trip to the local franchise tax prep firm at the mall in April ... a professional CPA (not a relative) can help organize your business expenses "to reduce your tax exposure" which is totally legal, and your attorney can help organize your thoughts and actions to match ... words matter.