Your Tax Question - 075

Dear John, I am considering starting a small business - what do you think?  Seriously, James
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Hi James, 


That is seriously a vague question.  While there is a thousand ways to go with that I will just say that I heartily approve.  The way that you set up your business needs to be considered because it will determine what rules you will have to follow while doing business and filing your taxes.  The more complicated the business the more you will need to follow the advice of an accountant, CPA, and or attorney.  Other than that, there is a lot of consideration so get ready to roll your sleeves up and have fun.


Best of luck,
John   

PS.  Please send me an email if you want to buy an hour or two of consultation. 

Your Tax Question - 036

Dear John, I own a small business with a small amount of lawn that needs to be cut each week during the summer. The business owner next to mine mows my lawn and I in turn help her by power-washing her storefront. I want to show the lawn as an expense to my business and she wants to show the power-washing as an expense to her business but no money actually changes hands. How is this situation viewed by the IRS? Thanks, Max
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Hi Max,

What you have is a bartering service situation. The IRS requires that your business and hers both value the services that you receive and included it in your gross incomes. You will have to enter this information on your Schedule C or C-EZ. Your accountant can explain how to track this in your books.

I hope this helps,
John

PS. Email me and we can talk.

Your Tax Question - 033

Dear John, I know I earned $500 worth of income from a side job this past year but I have not received a 1099 from the company that I did the work for - what should I do? Thank you, Gina.
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Hi Gina,

The company that you did the work for is not required to issue you a 1099 unless you earn more than $599.00 which means that you likely will not get one. Assuming that you do not have a business and do not file the Schedule C or C-EZ, You can claim this income on Line 21 of the Form 1040.

I hope this helps,
John

PS. I am more than happy to help you with this if you need a tax preparer. Email me.

Your Tax Question - 031

Dear John, This year I received my W-2 and I also received a 1099 from the same job but the 1099 has a different business name on it. My tax software is now requiring me to fill out a Schedule C as part of my taxes. Filing out a Schedule C is requiring me to answer a bunch of questions that I don't have answers for. Can I get around filing out the Schedule C? Thanks, Pat
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Hi Pat,

I don't want to get into a guessing game here so I would suggest that you call your company and find out if there was not a mistake and inquire why this happened. Remember, that the IRS will make a determination about your worker status, simply fill out Form SS-8.

Sorry, there really is no way around the Schedule C-EZ in this case. If there were no you taxes withheld from the 1099 (which I doubt that there were) you will have to pay double on the Social Security and Medicare portions of your wages. This is all covered on the 1040 SE form when you do your taxes. It should not be too difficult just a little extra effort.

I hope this helps.
John

PS. I know of a great tax guy if you need one. ;-) Email me