Sharon Deming Posted February 18, 2016 Report Share Posted February 18, 2016 2015 was my first year of business. I've consulted with a CPA, who charged me too much for his misunderstanding of the kind of business we are in. And I've talked with a couple of people at the local SBA (the director's wife is in the business, he is an accountant, and does her taxes - yea!). I've gotten a wealth of information from the SBA, and they're FREE! Anyway, while I'm waiting for his input on this question, I'll ask you, too. Do you depreciate your longarm over time? How many years do you use? I know there are some tax implications and singing and dancing when you sell the machine. Do you lease your longarm from yourself? What implications down the line does that have for you? I'll let you know what the SBA director and tax lady have to say about it when they respond. Thanks! Link to comment Share on other sites More sharing options...
jimerickson Posted February 18, 2016 Report Share Posted February 18, 2016 You certainly can, and should depreciate your machine when doing your business taxes. I think the most common practice is to depreciate machinery over seven years. Sometimes they allow you to do it more quickly. You'll really need to study the regulations to make sure, and to identify the best way for you personally. I think your business can also lose money for six or seven consecutive years, which you can deduct, before you have to abandon the business and call it a hobby. Again, you'll have to checks the regulations. Jim Link to comment Share on other sites More sharing options...
Cagey Posted February 18, 2016 Report Share Posted February 18, 2016 You might call turbo tax and ask if their Business tax program will handle this situation. If it does, then it will walk you through the steps to do this action. Using the program also allows you to contact them for tax questions concerning your individual concerns or conditions. They may be able to help you if you want to do your taxes yourself. My only concern and warning would be that if you depreciate it, do you ever use it for personal business? The same goes for the room you use for you business if it is inside your home. The IRS can get picky on those types of matters. I say go for using each and every tax deduction that you can legally use, as it is your duty to pay the least amount of taxes possible. Just do it correctly, so that a small deduction does not cost you more than expected in the long run with penalties and interest. If you use a tax professional to prepare you taxes, be sure ask about and get audit insurance. It costs me about $100 for it with my return each year. It ensures that the tax preparer will defend any and all tax calculations inside my return. That is to say, I bought a longarm for my new business. I gave him the price. They calculated the depreciation amount. The IRS audits my return and says it was done improperly. The insurance pays any and all cost for the IRS hearing, and then pays the fines and interest if it was the preparers error. The preparer has a vested interest to defend my return the highest level, as he more than likely used the same procedures in numerous tax returns. If the IRS decides the return is improper, I am responsible for the taxes, and I should have paid for them in the first place. Just be careful. Ask a lot of questions, take notes, and cross check the replies you get from other sources. You can never be too careful. Cagey Cagey Link to comment Share on other sites More sharing options...
judyday Posted February 19, 2016 Report Share Posted February 19, 2016 Let me do a little research on this. I will give you an answer along with the irs.gov publication to substantiate the deduction. I am a tax professional enrolled to practice before the IRS.GOV. Link to comment Share on other sites More sharing options...
judyday Posted February 28, 2016 Report Share Posted February 28, 2016 My husband and I had a terrible accident a couple of days after I posted this. We were driving our team of horses and a small wagon when an older man who could not see and should not have been driving hit us from behind driving about 55.we are broken and bruised but believe we will have no permanent damage. We had to put one horse down. She surely did not deserve that Needless to say I have not been able to research. Had some head injuries am in a neck brace. But praise God we are alive. The man suffered no physical damage but I am sure he is suffering remorse. I will still do yhis just not sure when. Link to comment Share on other sites More sharing options...
dlnewell Posted February 29, 2016 Report Share Posted February 29, 2016 Machinery purchased, whether new or used can be depreciated over several years or you can take the section 179 deduction and deduct the total cost of the machinery or just a partial amount and either carry over or string it out over several years. There are some limits but it's clearly spelled out in the instructions. In order to claim the section 179 deduction, you have to put the machinery in service in the year you purchased it. I depends on your other sources of income as to what would be best for you. Link to comment Share on other sites More sharing options...
Cagey Posted February 29, 2016 Report Share Posted February 29, 2016 Judy: I am sorry to read about you and your husbands injuries, and the lose of your horse. I will keep you and yours in my thoughts and prayers. I hope everyone is up and running like normal soon. Best of luck to you. Cagey Link to comment Share on other sites More sharing options...
gkazee Posted February 29, 2016 Report Share Posted February 29, 2016 I'm so sorry to hear of your accident and the loss of your horse. I have read of so many accidents in the last few year involving horses and bicycles and had a near wreck once myself when somebody threw a beer bottle at my horse while whooping and hollering as they passed me. There is always so many comments, especially on social media, about "those people should be on or near the traffic lanes. People are so self centered and arrogant these days......they must get to where they want to be with no thoughts to anyone else. Sorry for the rant. Hope you recover quickly. Link to comment Share on other sites More sharing options...
InesR Posted February 29, 2016 Report Share Posted February 29, 2016 Judy, Sorry to hear about your accident and the loss of your horse. I live in an Amish community and have horses myself. Very devastating for all involved. Glad to hear you and yours will be ok. Link to comment Share on other sites More sharing options...
Sheagatzi Posted March 1, 2016 Report Share Posted March 1, 2016 Judy, holy moly, I am so sorry to hear about your accident - rest and be well. Sending you speedy recovery vibes!! Link to comment Share on other sites More sharing options...
Liam Posted March 2, 2016 Report Share Posted March 2, 2016 Judy, Sorry to hear about your accident, as well as the loss of one of your horses. Hope you and yours have a speedy recovery. Will add you and yours to my prayer list. Link to comment Share on other sites More sharing options...
jmcclannan Posted March 2, 2016 Report Share Posted March 2, 2016 We use TurboTax Home and Business and it does the depreciation for you. Easy! Link to comment Share on other sites More sharing options...
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