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another tax question - re - business

those of you who own your own business, and have claimed a loss - exactly how far do you take it?

Okay - my situaiton - now that I have totalled up my books (ahem Hmm) I have a $63 dollar loss. This is just sales vs supplies that I have bought - not including my electricity for the house, depreciation on household equipment, cell phone, internet, ect......I could run this loss up bigger than schit.

Anyway, how far do you take it? I dont want to get dinged by the IRS, so I dont quite know. I do have receipts for all my food expenses - but I never did keep my electricity bills. Is that a huge problem?

Re: another tax question - re - business

  • With all of my business's I report everything whether it equals a loss or profit. You could easily see how much electricity is just by looking back at your check book to see what you pd or I'm sure call the elect company. 
  • I would count it all.  I always have a loss with my travel biz because I travel so often myself and it's a tax write off.  OPPD has an online login that allows us to see past electric bills, I'm sure you could log on to your IA power provider and get that info. 
  • I know i showed a loss but not exactly how much since I had a guy do it (he's a friend in lincoln) and just know i didn't have to pay in. Definately include EVERYTHING!

    Krissy, can you only show a loss for like 5 years? True or false? That's what i thought I heard. Getting hit by taxes will suck someday (if i'm still doing my biz years down the road).

    Holly
  • Your accountant will be able to tell you how much of the loss you can deduct.  A lot of other factors go into how much a loss you can deduct - other income sources and those amounts, how many of the last five years you've already claimed a loss for the same business, etc.

    And like PP said, there are a lot of ways to get a hold of your old electricity bills.

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  • You should include all business related expenses.  Do you have access to your electricity bills online?  We have had some significant losses, which we were able to use to offset income, in the past few years for our rental business.  I am not "worried" about the IRS, bc I know all of our expenses and deductions were legitimate business expenses and deductions.  I would consult with your CPA over your specifics.

    Also, if you have losses - all the more reason to keep your cake biz going.  I need more Tiff cakes dammit! Wink

  • Like a pp said, you total it all up and when it's a loss it's a loss, and when it's a profit, it's a profit. It's especially good to get all of your equipment on there for depreciation purposes. Keep in mind on the electric bill that unless the whole bill is for a space that's only used for your business that you can't deduct the whole thing.
  • image hvanack:

    Krissy, can you only show a loss for like 5 years? True or false? That's what i thought I heard. Getting hit by taxes will suck someday (if i'm still doing my biz years down the road).

    I'm not sure, I'll have to ask my tax lady.  I've been doing this for 4 years now at a loss, so we'll see!

  • image luvjon:
    image hvanack:

    Krissy, can you only show a loss for like 5 years? True or false? That's what i thought I heard. Getting hit by taxes will suck someday (if i'm still doing my biz years down the road).

    I'm not sure, I'll have to ask my tax lady.  I've been doing this for 4 years now at a loss, so we'll see!

    Here's a good article on the irs.gov website that provides an overview on how to determine what can be deducted for your small business - and about halfway down, it addresses the question many of you have about the 5-year loss rule: http://www.irs.gov/irs/article/0,,id=186056,00.html.

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    [IMG]http://i55.tinypic.com/6f4j8o.jpg[/IMG]
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