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Old 02-05-2019, 08:29 AM
 
7,823 posts, read 3,413,774 times
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Quote:
Originally Posted by GoCUBS1 View Post
Incorporate as a pass-through business, expense everything your accountant says you can get away with, claiming losses carried forward - we can no longer do this , maximizing owner share of 401K and profit sharing, buying/renting out your commercial building(s)... And a new one I’m just beginning to explore - having the cash flow to self-fund a company health savings account for your employees...
The carry back provision was eliminated, but carry forward is still allowed. As it should be.
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Old 02-06-2019, 03:40 PM
 
Location: Chicagoland
5,720 posts, read 9,047,924 times
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Quote:
Originally Posted by TaxPhd View Post
The carry back provision was eliminated, but carry forward is still allowed. As it should be.
Yes, but personally we can no longer do this because we have no more losses to carry forward... After all those lean years of low income/losses carried forward, we are finally making real money as our 3 kids enter college and we now qualify for absolutely ZERO needs-based scholarship even at the priciest $70K+ schools. And the schools that my kids are looking at don’t give any merit scholarships, for which they would qualify. Not that I’m complaining or anything, just venting on my poor timing for making money...

Last edited by GoCUBS1; 02-06-2019 at 03:49 PM..
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Old 02-06-2019, 03:51 PM
 
Location: Aurora Denveralis
8,717 posts, read 3,925,638 times
Reputation: 13380
Quote:
Originally Posted by Tencent View Post
Right, but what if it's $20k in legit expenses? That's a lot of tax savings.
Well, not to GM.

Business costs are business costs; if you're succeeding, they're less than your business income. "Deductions" are not a magical giveaway, they are just an adjustment of gross to net profit. As such, they need to be reasonable and purposeful expenditures in the first place.

But there is an intensely peculiar mindset about them, a vague notion that deductions from taxable income are a thing of their own, to be scrambled after irrespective of their purpose. Almost to the point where burning the money is better than paying taxes on it, ha ha ha Uncle Sam. Cult behavior.
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Old 02-06-2019, 05:11 PM
 
7,823 posts, read 3,413,774 times
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Quote:
Originally Posted by GoCUBS1 View Post
Yes, but personally we can no longer do this because we have no more losses to carry forward... After all those lean years of low income/losses carried forward, we are finally making real money as our 3 kids enter college and we now qualify for absolutely ZERO needs-based scholarship even at the priciest $70K+ schools. And the schools that my kids are looking at don’t give any merit scholarships, for which they would qualify. Not that I’m complaining or anything, just venting on my poor timing for making money...
Sorry, I misunderstood your post. I thought you were saying that losses could no longer be carried over, not that you personally no longer had losses available.

Thanks for clarifying.
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Old 02-07-2019, 01:21 PM
 
Location: NJ
26,677 posts, read 32,380,465 times
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Quote:
Originally Posted by Quietude View Post
What puzzles me is how many people have a strange interpretation of this process - that doing all this somehow makes it "free" or makes Unca Sam pay for it or something.
yes, its funny how some people refer to "writing things off" as if it makes something free or any kind of a special deal. well, its a business expense so it counts against the revenue earned to reduce income. its not like some gift from donald trump.
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Old 02-08-2019, 08:11 AM
 
Location: Union City, NJ
1,854 posts, read 1,194,562 times
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Quote:
Originally Posted by CaptainNJ View Post
yes, its funny how some people refer to "writing things off" as if it makes something free or any kind of a special deal. well, its a business expense so it counts against the revenue earned to reduce income. its not like some gift from donald trump.


Part of my job is meeting with small business owners to sell them banking services. I was speaking to a business owner who said he didn't care how much his fees are because he's going to just "get that all back" when he does his taxes. I politely explained while business expenses do lower do your overall tax burden, you still have to pay for them and you don't exactly "get that all back." He persisted with his line of thinking and I just had to say thank you and have a nice day at that point. About two weeks later he was in my office asking for fee refunds.
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Old 02-08-2019, 11:24 PM
 
Location: Gulf Coast
1,317 posts, read 779,147 times
Reputation: 2682
I'm amazed at what people will do to avoid paying taxes. We document everything and take all the legal deductions available. People give us checks and purposely leave the name off so we can do what we want with the money...and we stamp with our business name and put in the business account. I'm not real happy paying taxes, but find that preferable to worrying about an audit or getting in trouble and paying fines.


Losses year after year after year doesn't sit well with the IRS. They start to look at you like it's a hobby...


I do know we're small potatoes compared to many others and unlikely to get audited... but I also like to sleep at night without worry around tax time.
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Old 02-08-2019, 11:27 PM
 
Location: SC
8,795 posts, read 6,217,527 times
Reputation: 12881
Research a KEOGH
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Old 02-09-2019, 04:38 AM
 
1,285 posts, read 536,931 times
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Quote:
Originally Posted by Tencent View Post
<snip>Are you incorporated? Have you had a problem or been flagged for hobby loss rules yet?
I am a single member LLC - I haven't had any tax or IRS problems, and I also haven't had a loss. My 1099s have always added up to significantly less than my actual income, and I claim my actual income. Not much sense coming after someone who claims $20k more in income than the IRS knows about!
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