Help with tax write offs for small business?
Friday, September 17th, 2010 at
6:14 pm
My family owns a small farm two states over from where I live.
This is the first year we will be operating as an LLC and have to worry about taxes.
Could equipment and tools be written off on taxes?
How about mileage since I live two states away and have to make a 500-mile-round-trip drive to get back and forth?
Also, should I talk to an accountant or a tax lawyer?
And would that be with a accountant or tax lawyer in the state I reside or the state the farm is?
Any help would be appreciated.
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Lots of information in your question that can be trouble. Talk to a CPA.
Farm and an LLC, hire a professional for help with taxes. It’s too late to seek competent legal advice, the monster is already created. Trying to do this yourself would be like starting up as a race car driver with no mechanic. An LLC can be taxed as a sole proprietorship, partnership, C corporation, or S corporation. If you don’t know the difference, you just started up as a race car driver but don’t know whether you’ll be driving funny cars, dragsters, stock cars, or formula I. I just shake my head when people create legal entities without knowing what they’re doing.
A local tax professional can help as long as they’re familiar with the tax laws in the state where the business is located. Make some phone calls. There are lots of pretenders out there who claim to understand LLC issues but don’t. You’ll be able to tell in a phone conversation if the person you’re speaking with knows what they’re talking about.
first of all, an LLC can be reported as a Corp, a Partnership, or a sole Proprietor(Sch C)
you need to determine how you want to file and the Corp is reported on a form 1120, a Partnership, on 1165
they are totally separate from your personal tax return, they are an entity of themselves, and pay their own taxes–separate from your own
you might get publication 34 from http://www.irs.gov to help determine what expenses you can charge
yes, equipment will more than likely need to be set up for depreciation, unless this is new equipment which allows a 179 deduction
depends on how costly the tools are
your mileage is questionable until you decide the manner you plan to file
I would say you do need some additional advice, who helped you set up the LLC? didn’t they advise you at all?
Commuting to work is never deductible. You definitely want a professional to do your taxes.