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Bartek

Taxes!!!!

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hello,

I was wondering If I could get some advice from you guys.

I was prepping to do my taxes and as it turns out It looks at the moment like I will have to pay about $6000. Ouch!

I am incorporated as a "S" corp.

Another thing is that it has become apparent that last year my previous accountant wrote off all my equipment costs in 2005 rather than depriceating the cost, and that is hurting me this year. What to do? Shall I try to "fix" the depreciation issue or will that come back hurting me more?

Any comments or ideas are welcome.

Bartek

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I can't help you w/ the S corp stuff, but what your accountant did is very normal, since the gov. allows you to write off up to $15k of stuff in the year you bought it, rather than stringing the deductions out over several years.  (It may be more than $15k/yr now.)  I guess the accountant could have asked you about it, but what they did is pretty standard, and what I've done for the past many years.  Most people want the maximum cut in their tax liability for the year at hand, and it also makes the year to year bookkeeping much simpler.

Philip Perkins

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Guest Jeff Colon

The straight line or all at once depreciation limits are really good for capitol outlay for gear and vehicles... a bit more than the 15k these days.

http://www.taxguru.org/incometax/Rates/Sec179.htm

That being said, keeping records of all business related expense in something like quickbooks and an accountant who is familiar with freelance type self employment can save some big bucks... Unless you have some withholding (payroll) at year end, you might be libel for Penalties and interest for not filing quarterly... I wish I could take advice as good as I give... all the April B days here and mine is the fifteenth.  I usually give myself an exstension...OY!

Jeff C

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