Starting my own business...

[Pegun]

I talked to an exec at the company I'm going to work for and he said it would be better for me to sign up as a private consultant, basically by owning my own business. So if I do this, I give him an invoice every week or two and they pay me directly. I know that I have to pay my own taxes and social security and medicare at the end of next year (since im just starting now) but what about writeoffs? I've heard you can use cars, gas milage, computers and software used for business purposes etc. But how does it get to the point where you pay taxes and write this stuff off? Does the government ever owe you money for writing these things off?

 

[spaceman]

Originally posted by: Pegun
I talked to an exec at the company I'm going to work for and he said it would be better for me to sign up as a private consultant, basically by owning my own business. So if I do this, I give him an invoice every week or two and they pay me directly. I know that I have to pay my own taxes and social security and medicare at the end of next year (since im just starting now) but what about writeoffs? I've heard you can use cars, gas milage, computers and software used for business purposes etc. But how does it get to the point where you pay taxes and write this stuff off? Does the government ever owe you money for writing these things off?

i was under the impression you had to do tax quarterly as a business but i am no business man.
interested in where this thread goes tho

 

[ponyo]

You'll basically be a contractor. They'll pay you without deducting taxes and then send you 1099 misc in January. You then file your taxes and take your business deductions. You're going to have to decide if you want to be sole proprietor or corporation.

If you make decent money you'll want to file quarterly taxes so you don't get hit with penalty and interest.

Get a CPA since you don't know what you're doing.

Oh, the government never owes you money. You always owe the government. Forget refund check. Tax man owns you.

 

[Pegun]

The finacial director said he'd help me when it comes to the whole tax thing. CPA? Don't know what the means exactly. But He told me about the 1099 and said that filing depends on how much you actually make. If I make enough file quarterly but otherwise file yearly. I don't know exactly how much i will be making at the moment. It really depends on how much help they're going to need when it comes to their web page. Just a thought: does H&R Block do anything in terms of private businesses or am i better off doing it myself?

 

[drnickriviera]

I hope they are paying you well. Sounds like a good way to get an employee, but not have to pay any benefits, and could be 'fired' at any time.

 

[ponyo]

CPA is certified public accountant. They can help with your personal and business taxes.

I'm a contractor and I file as sole proprietor. So file 1099 with schedule C which shows business profit and loss. I used CPA when I first started out and when I used to own a restaurant but over the years switched to doing my own. With programs like TurboTax and TaxCut, doing taxes is so much easier now so I don't really need CPA's help.

It sounds like filing as sole proprietor will work for you and I don't recommend places like H&R Block. Not to say those places are bad but if your taxes are that simple, program like TurboTax will be better and cheaper. If your taxes are complicated I would suggest paying money to CPA rather than waste money at H&R Block.

 

[tfinch2]

Originally posted by: Pegun
I talked to an exec at the company I'm going to work for and he said it would be better for me to sign up as a private consultant, basically by owning my own business. So if I do this, I give him an invoice every week or two and they pay me directly. I know that I have to pay my own taxes and social security and medicare at the end of next year (since im just starting now) but what about writeoffs? I've heard you can use cars, gas milage, computers and software used for business purposes etc. But how does it get to the point where you pay taxes and write this stuff off? Does the government ever owe you money for writing these things off?

Why would the government ever owe you? You only get back as much as you pay, and if you pay 0, why would you get anything back?

 

[Pegun]

I dont know about the writeoffs, thats my questions. At what point does it make it so that you can write off certain supplies and certain amounts

 

[EagleKeeper]

Originally posted by: Pegun
I dont know about the writeoffs, thats my questions. At what point does it make it so that you can write off certain supplies and certain amounts

If you are filing a Schedule C, everything valid can be written off against the income.

 

[George P Burdell]

Originally posted by: Naustica
Oh, the government never owes you money. You always owe the government. Forget refund check. Tax man owns you.

LOL

 

[SampSon]

You should set up your own LLC, then your client pays you (your LLC) and then the LLC pays you as it's sole employee.

Beyond the basic understanding YOU NEED A PERSONAL ACCOUNTANT.

 

[AlienCraft]

Originally posted by: SampSon
You should set up your own LLC, then your client pays you (your LLC) and then the LLC pays you as it's sole employee.

Beyond the basic understanding YOU NEED A PERSONAL ACCOUNTANT.

LLC = Limited Liability Corporation .
Besides having your personal assets (house, car, other businesses, etc.) shielded from any action against you personally as a result of any legal judgements against the new business, you gain certain advantages being a corporation.
Example pay yourself a One dollar salary and the rest in tax advantaged Stock options or Bonuses.
Consult a tax attorney and CPA to decide which is the best way for you. Legal and professional fees are deductible also, btw.