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If I recall correctly there are strict limitations on counting your car, cell phone and rent as business expenses and they require extensive amounts of document
by brazzledazzle 10y ago
If I recall correctly there are strict limitations on counting your car, cell phone and rent as business expenses and they require extensive amounts of documentation. I don't know how much they enforce these days since everyone and their brother is hustling a pyramid scheme business but I would research it first. Getting audited without reliable mileage logs, phone records in your favor and a measurable separation between your personal living space and your work area (like a door) could result in being stuck with a tax bill for back taxes.
- chrisgoman 10y agoYou are correct, there are very strict rules so you do need to make an attempt at making money (the definition of a "business"). If you are actually making a profit (thereby paying taxes for your business entity "the LLC"), then it makes it much easier. Now that I think about it, I think I end up paying my accountant/tax firm about $30k/year mostly for tax returns (I do most of the accounting myself in Xero)
- brazzledazzle 10y agoWow, that's quite an accounting bill. If that's for a small-to-medium size business do you mind if I ask why it's so much? I've heard good things about Xero, are you happy with it?