Searching \ for '[OT]: Tax questions relating to contracting and sm' in subject line. ()
Make payments with PayPal - it's fast, free and secure! Help us get a faster server
FAQ page: www.piclist.com/techref/index.htm?key=tax+questions+relating
Search entire site for: 'Tax questions relating to contracting and sm'.

Exact match. Not showing close matches.
PICList Thread
'[OT]: Tax questions relating to contracting and sm'
2003\02\03@093921 by Micro Eng

picon face
First off....if this turns into a thread about why we pay taxes,
etc...someone please KILL it.  This is related to a real question.


This year I finally did some contracting where I was not considered an
employee so I got the good ol 1099-MISC.  Thats ok, fill out the schedule C
and figure out my taxes on it, pretty straight forward.

If I bought equipment, such as a laptop, primarily for doing this work, can
I write it off? What if I payed for part of it last year, and part of it in
this year? I assume I can only account for the amount I payed this year
correct?

However, like many on here, I am working toward releasing some products
where I will be selling locally to some businesses (you know....if you make
it, they will buy it situation). So how does one account for this income?
Still on schedule C I imagine?




_________________________________________________________________
Help STOP SPAM with the new MSN 8 and get 2 months FREE*
http://join.msn.com/?page=features/junkmail

--
http://www.piclist.com hint: The PICList is archived three different
ways.  See http://www.piclist.com/#archives for details.

2003\02\03@164005 by Andrew Warren

flavicon
face
Micro Eng <spam_OUTPICLISTTakeThisOuTspammitvma.mit.edu> wrote:

> This year I finally did some contracting where I was not considered
> an employee so I got the good ol 1099-MISC.  Thats ok, fill out the
> schedule C and figure out my taxes on it, pretty straight forward.
>
> If I bought equipment, such as a laptop, primarily for doing this
> work, can I write it off?

   I'm neither an attorney nor a CPA, but yeah... You can write off
   the percentage of your cost equal to the percentage of time that
   the laptop is used for business.  In other words, if you paid
   $2000 and use the laptop 50% for business and 50% for personal
   activities, you can write off $1000.

   If your expenses don't exceed the Section 179 limit (somewhere
   around $15-20k these days), you don't have to amortize/depreciate
   your expenses over multiple years.

> What if I payed for part of it last year, and part of it in this
> year? I assume I can only account for the amount I payed this year
> correct?

   If your payments extended over 2001 and 2002 and your accounting
   methods are what I expect they'd be for a casual consulting gig,
   then I believe that you are correct.

   If your business's 2001 income wasn't enough to offset the 2001
   portion of your laptop payment, you can carry the difference
   forward to 2002 and use it to offset 2002 income... So if you
   made no money from this business in 2001, you could effectively
   write off the entire laptop cost in 2002.  If you've already
   submitted your 2001 return and now want to amend it, you can do
   that pretty easily; there's a form from the IRS.

> However, like many on here, I am working toward releasing some
> products where I will be selling locally to some businesses (you
> know....if you make it, they will buy it situation). So how does
> one account for this income? Still on schedule C I imagine?

   Yep, Schedule C is the place where all your Sole Proprietership
   data goes.

   You may want to think about buying some commercial tax
   preparation software (like TurboTax or whatever); it'll make all
   this stuff real easy.

   -Andy

=== Andrew Warren -- .....aiwKILLspamspam@spam@cypress.com
=== Principal Design Engineer
=== Cypress Semiconductor Corporation
===
=== Opinions expressed above do not
=== necessarily represent those of
=== Cypress Semiconductor Corporation

--
http://www.piclist.com hint: The PICList is archived three different
ways.  See http://www.piclist.com/#archives for details.

2003\02\03@181902 by Chris Loiacono

flavicon
face
I can't and won't give tax advice, but since it sounds like you are writing
about US taxes, I can share a few generalizations.
1. you can likely get by this year by following the instructions for 1040 &
Sch C. These usually clearly define the "paid this year, used that year
questions" If you purchased the tools the year before you intended to use
them for profit, you most likely will get no benefit from the expense.

2. You could also take a chance and file in ignorance - since the IRS has
been in a very lenient mood.

3. You'd do better to spend all the extra $ you earned on professional
advice - (CPA style only) if you want to keep earning extra $$ year after
year without tax problems or legal headaches. I expect any CPA worth his
salt will advise that you set up a legal entity of some sort, profit corp,
LLC, etc... in order to facilitate this. Another reason is that as an
individual selling to businesses, you are bound to eventually find a
customer who will buy from you because you are an individual and he knows he
can sue & win your home out from under you, simply because he can afford the
legal fees - even if you never do anything wrong or make anything defective.

4. If you don't believe there are people out there looking to exploit, abuse
& rob you in this way, give up now and stay dedicated to your day job.

Just my 2 cents
C

> {Original Message removed}

More... (looser matching)
- Last day of these posts
- In 2003 , 2004 only
- Today
- New search...