Open a business easy as cake?!?!
#1
Open a business easy as cake?!?!
it seems to good to be true on the surface; anyone can register a business and expense things such as gas, food, part of their mortgage (if ur house is ur home office) and so on..
but whats the catch here? why doesn't everyone and their brother do this?
someone shed some light on this....
but whats the catch here? why doesn't everyone and their brother do this?
someone shed some light on this....
#3
it seems to good to be true on the surface; anyone can register a business and expense things such as gas, food, part of their mortgage (if ur house is ur home office) and so on..
but whats the catch here? why doesn't everyone and their brother do this?
someone shed some light on this....
but whats the catch here? why doesn't everyone and their brother do this?
someone shed some light on this....
i do consulting. i expense my car (per km i drive for side jobs), i expensed my laptop (which was purchased to take with me when I meet clients), i expense training courses I take (which help me in my role), I expense a night at a bar here and there when I take out a potential client.
The best case is if you're a contract employee that bills through his own company, and you do side jobs through your own company. You can expense all your travel.
#4
it's a bit of an investment. I have my own corporation. there are some expenses like needing a certified accountant.
i do consulting. i expense my car (per km i drive for side jobs), i expensed my laptop (which was purchased to take with me when I meet clients), i expense training courses I take (which help me in my role), I expense a night at a bar here and there when I take out a potential client.
The best case is if you're a contract employee that bills through his own company, and you do side jobs through your own company. You can expense all your travel.
i do consulting. i expense my car (per km i drive for side jobs), i expensed my laptop (which was purchased to take with me when I meet clients), i expense training courses I take (which help me in my role), I expense a night at a bar here and there when I take out a potential client.
The best case is if you're a contract employee that bills through his own company, and you do side jobs through your own company. You can expense all your travel.
the thing is, his motive I think is to expense everything off the bat...so if he can't prove that he has revenue and yet he's expensing a lot of things, will that raise a red flag?
#5
you can't expense everything. you can carry over a loss no problem.
so year 1, i list $10,000 in expenses and only $2,000 of income.
That is fine.
What you can't do is expense your car 100% and use it 50% of the time as recreational. That's why I pay myself by the KM, instead of the 10% I use it for my corporation.
You can only expense so much on 'entertainment' - ie dinner and drinks
if you go to las vegas during a convention related to your business you can claim your flight and hotel, etc.
you can't just open a company and expense strip clubs and beer store purchases.
he really should talk to a certified accountant, not some guy who just went to college and is trying to become a book keeper if he wants to get proper information.
generally speaking, if you cheat the government enough that it's worth the risk and you aren't filthy rich, you're going to get caught and you're going to pay out of your ***.
I personally think it is immoral to cheat on your taxes. It is what pays for your roads, healthcare, police to ticket you for driving reasonably, and murdering children in Afghanistan.
If you cheat your taxes, you really have no right to complain about the state of the public education system, or how long it took the health system to operate on your mothers cancer. It's your fault.
so year 1, i list $10,000 in expenses and only $2,000 of income.
That is fine.
What you can't do is expense your car 100% and use it 50% of the time as recreational. That's why I pay myself by the KM, instead of the 10% I use it for my corporation.
You can only expense so much on 'entertainment' - ie dinner and drinks
if you go to las vegas during a convention related to your business you can claim your flight and hotel, etc.
you can't just open a company and expense strip clubs and beer store purchases.
he really should talk to a certified accountant, not some guy who just went to college and is trying to become a book keeper if he wants to get proper information.
generally speaking, if you cheat the government enough that it's worth the risk and you aren't filthy rich, you're going to get caught and you're going to pay out of your ***.
I personally think it is immoral to cheat on your taxes. It is what pays for your roads, healthcare, police to ticket you for driving reasonably, and murdering children in Afghanistan.
If you cheat your taxes, you really have no right to complain about the state of the public education system, or how long it took the health system to operate on your mothers cancer. It's your fault.
Last edited by bruce fee; 28-Sep-2009 at 02:34 PM.
#6
you can't expense everything. you can carry over a loss no problem.
so year 1, i list $10,000 in expenses and only $2,000 of income.
That is fine.
What you can't do is expense your car 100% and use it 50% of the time as recreational. That's why I pay myself by the KM, instead of the 10% I use it for my corporation.
You can only expense so much on 'entertainment' - ie dinner and drinks
if you go to las vegas during a convention related to your business you can claim your flight and hotel, etc.
you can't just open a company and expense strip clubs and beer store purchases.
he really should talk to a certified accountant, not some guy who just went to college and is trying to become a book keeper if he wants to get proper information.
generally speaking, if you cheat the government enough that it's worth the risk and you aren't filthy rich, you're going to get caught and you're going to pay out of your ***.
I personally think it is immoral to cheat on your taxes. It is what pays for your roads, healthcare, police to ticket you for driving reasonably, and murdering children in Afghanistan.
If you cheat your taxes, you really have no right to complain about the state of the public education system, or how long it took the health system to operate on your mothers cancer. It's your fault.
so year 1, i list $10,000 in expenses and only $2,000 of income.
That is fine.
What you can't do is expense your car 100% and use it 50% of the time as recreational. That's why I pay myself by the KM, instead of the 10% I use it for my corporation.
You can only expense so much on 'entertainment' - ie dinner and drinks
if you go to las vegas during a convention related to your business you can claim your flight and hotel, etc.
you can't just open a company and expense strip clubs and beer store purchases.
he really should talk to a certified accountant, not some guy who just went to college and is trying to become a book keeper if he wants to get proper information.
generally speaking, if you cheat the government enough that it's worth the risk and you aren't filthy rich, you're going to get caught and you're going to pay out of your ***.
I personally think it is immoral to cheat on your taxes. It is what pays for your roads, healthcare, police to ticket you for driving reasonably, and murdering children in Afghanistan.
If you cheat your taxes, you really have no right to complain about the state of the public education system, or how long it took the health system to operate on your mothers cancer. It's your fault.
The Gov can audit you up to 7 years back? is that the rule?
#7
7 years is at least the minimum, it might be more? i am sure at least 7 years.
#8
Also, you can expense your costs even if you have little to no income, as long as it's reasonable. If you're doing R&D then it's expected to show high expenses and no income for several years. However, if it's a regular business, you're going have to show a year over year increase in revenue otherwise it's goign to come across as suspicious. Of course, you can easily show that on paper. Not that I'm advocating any kind of fraud.
There is no time limit or expiry date for being audited for a given tax year. That being said, you're only required to keep your business records for 6 years, so they'll have a tougher time proving any wrong doing after that period.
#10
my friend is looking to register a business...hope to acquire some clients and go from there...it's a financial consulting business
the thing is, his motive I think is to expense everything off the bat...so if he can't prove that he has revenue and yet he's expensing a lot of things, will that raise a red flag?
the thing is, his motive I think is to expense everything off the bat...so if he can't prove that he has revenue and yet he's expensing a lot of things, will that raise a red flag?
If this is not what you meant, ignore my post
#11
What is he expensing it against? You can carry the loss forward sure but business expenses can only be expensed against business income. Assume he is currently employed at a salaried job and making 50k/year. Then is what he wants to do is register a business that has $0 income and expense "business expenses" off the 50k/year day job? This is not allowed since that 50k/year is not business income. Unless he can get his boss to hire him as a contractor/consultant at the same time.
If this is not what you meant, ignore my post
If this is not what you meant, ignore my post
#12
Think of it this way. You have to pay the tax before you can get some back. Your business needs to have an income and have a value before it can loose money as a business. Part time home business works well for me I loose money every year so it seems.
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