yeoldeforest Posted February 13, 2009 Report Share Posted February 13, 2009 Since it's tax season and I'm in the mode - let's start a thread about legitimate business expenses for longarmers! If you bought a longarm quilting system in 2008, don't forget about the section 179 deduction! It does apply to quilting systems if they are business assets! ...and it's a great tax saving tool to offset a spouse's or your own income. There are limitations. You must use this deduction the year in which the asset was bought or you forfeit this deduction. Here's a few links with more information about the section 179: http://www.irs.gov/businesses/small/article/0,,id=184934,00.html http://www.section179.org/section_179_deduction.html http://en.wikipedia.org/wiki/Section_179_depreciation_deduction One of my favorite tax links is: http://www.irs.gov/businesses/small/index.html The above link even has tutorials for small business owners. Of course, there are limitations and, as always, talk with your Financial Adviser or CPA. Here's a few more legitimate tax expenses for longarmers who run a business: 1. Longarm class fees and expenses associated with those classes like hotel, gas, food, etc. (watch the dining out...limited to 50% and must be related to a business purpose) 2. Tools, gadgets, patterns and other "tools" of the trade 3. Samples for your business 4. Vehicle deductions for business related travel (going to your guild meetings may qualify!) So what do you all report as legitimate tax expenses on your tax return for longarm businesses? Link to comment Share on other sites More sharing options...
DoryJM Posted February 13, 2009 Report Share Posted February 13, 2009 Joanne, I just came up for air and noticed your post. This is perfect timing. This will be the first year that my husband and I have had to file business taxes. I'm going to check out the links you listed as well as make sure my CPA knows about all of them as well. Thanks for the info! Link to comment Share on other sites More sharing options...
quiltmonkey Posted February 13, 2009 Report Share Posted February 13, 2009 Hey! So... what is going on here?? No Blizzard spoons are deductable? I was starting to save mine and planned to staple them together as backup documentation on my tax forms! Joanne, you are so good. Lucky us to have these great resources thanks!! Link to comment Share on other sites More sharing options...
Renae Posted February 13, 2009 Report Share Posted February 13, 2009 :D:D.......Shana, I love your idea because I'm sure you were discussing quilting at the time right???? Renae Link to comment Share on other sites More sharing options...
ThreadWaggle Posted February 13, 2009 Report Share Posted February 13, 2009 As long as you are using the blizzard spoons as a tool then they would go in category #2, Right. Tool of the trade. I can just see the IRS auditor's face on that one. LOL. Too bad I can't claim the health club membership. I need the blizzard spoons, so I buy the blizzard and eat it and then re use the spoon. The blizzard causes me to need to exercise so I bought the gym membership. Really I only ate the blizzard for the spoon, I needed that spoon for my business, I swear it. Link to comment Share on other sites More sharing options...
Sheri Butler Posted February 15, 2009 Report Share Posted February 15, 2009 Remember you can write off your business cards as well **advertisement**....I already have done our tax's and I think (if i'm remembering correctly) it was under misc. deductions (which listed the are for $$ spent on advertisement/promotional data) which is EXACTLY what our business cards are for! Link to comment Share on other sites More sharing options...
yeoldeforest Posted February 16, 2009 Author Report Share Posted February 16, 2009 The blizzard spoons are funny! The gym membership may not be too far fetched if you can prove that you get a certain percentage of clients from the gym. Maybe if you quilt your workout outfit and embroider your business name on your sweats, you might be onto something. I write off my quilt guild memberships and mileage to and from the meetings and definitely business cards. So maybe if you can get a bunch of quilters to join a gym at the same time...hhhmmm... Just remember Tax Avoidance is legal, Tax Evasion is illegal! Oh, about the advertising - if you are taking a lot of "potential" longarm clients on your yacht and have a banner or flag that says "Longarm Services" - you probably will not be able to write all of your yacht expenses off as an "advertising" expense! A CPA actually tried to write his yacht off as "advertising" or business expense because he had a flag that advertised his tax services. The IRS didn't quite see it the same way. Leave it to a CPA to create more tax regulations. (I'm a CPA so I can make fun of the yacht...and the "creative" CPA) Link to comment Share on other sites More sharing options...
aktink Posted February 17, 2009 Report Share Posted February 17, 2009 Joanne, I have a quick question. You mentioned that if you bought your LA in 2008 for your business you could use it as a right off? I did buy a LA in 2008 but did not actually start my business yet (no customers or local business license yet). Does that mean when I start it up this year I will not be able to use the machine as a right off at all? I did buy it as a business but wanted to get a little practice on it first before accepting clients. Link to comment Share on other sites More sharing options...
JustSewSimple Posted February 17, 2009 Report Share Posted February 17, 2009 What do you all think abou this? My banker guy suggested I keep my machines as personal property and lease them from myself by the month. That way they never depreciate in value. Link to comment Share on other sites More sharing options...
LTL Posted March 14, 2009 Report Share Posted March 14, 2009 Joanne, you asked about not yet starting your business in 2008. Actually you may be able to consider 2008 the start of your business as a start-up phase that typically includes acquiring machinery and equipment, research & development, training, etc. As long as you will start to make sales in 2009. Of course, the actual particularities should be discussed with a CPA. I do have a background in accounting and finance, but consulted with a CPA my first year. It's worth every bit of the cost. as your own circumstances separate from the business (or pre-business) will differ from others. Link to comment Share on other sites More sharing options...
AnnHenry Posted March 14, 2009 Report Share Posted March 14, 2009 I took out a second mortgage and then paid for my machine in full with cashier's check in 2007 although my machine wasn't to be delivered until 2008. At that time I was making big bucks and I wanted that big deduction against my big income at the time. My CPA told me later (much later) that I couldn't deduct that big amount in 2007 because I didn't use it then! ! ! I never even thought about consulting a tax advisor before I bought my machine. I just assumed I could deduct the whole thing, and I couldn't. Pay money for tax advice ! ! Link to comment Share on other sites More sharing options...
aktink Posted March 15, 2009 Report Share Posted March 15, 2009 We do have a CPA since my husband's taxes are so detailed. We ran it by him and since it was delivered and paid for in 2008 he said I could use it as a deduction. I don't know if it mattered that I had "used" it or not, I definitely hadn't done business with it. I am still in the practice stage, my sister and friend hope I don't leave the practice stage now since they are getting their projects done by me. Link to comment Share on other sites More sharing options...
yeoldeforest Posted March 15, 2009 Author Report Share Posted March 15, 2009 aktink, Listen to you CPA! He will give you good advice and stand behind it. Link to comment Share on other sites More sharing options...
Mary Beth Posted March 15, 2009 Report Share Posted March 15, 2009 I was talking to DH about our taxes, fees and licenses that I have to have, that some other quilters in my area don't seem to bother with. He said that it is because we have the studio in our home, we deduct part of our home as a business. They go by the square footage occupied by the business, so if it is 1/3 of the home, then you can deduct some of the expenses of the up keep and maintanence of the home in addition to your regular business deductions. Here all this time, I have been thinking that I have been paying out the waahzoo (spelling) for things, and it is all because we deduct so many thing. We do have a CPA who figures our taxes, so I trust him and my DH...cause I hate numbers and I don't want anything to do with this stuff...In fact, I have been avoiding this topic ever since it showed up here Today is the first time I have clicked on it Link to comment Share on other sites More sharing options...
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