You can't do both vehicle depreciation and mileage. One or the other for the work truck /van. Once your vehicle is depreciated you can take mileage. My last work truck I was tracking mileage. Another way to reduce your taxable income is by opening a SEP IRA. Once you do your taxes you will know how much you made. You can put up to 25% of your income into that SEP.
@@TheHandymanBusiness I think you got talking to fast and forgot to say it's one or the other. That's why you always say to check with a tax professional. 💲💲🦌
You're a really good man bro. I don't have anyone to teach me this. Wasn't taught much at all from my parents growing up so I'm out here learning it all myself on everything. So videos like these really save me. Especially in the future! I know it's a headache trying to make sure you're always doing all this right but man it's so much better knowing I can go go to bed in peace not wondering when the IRS is coming for my assest. The receipt printer alone is a savior. Not including the tax advice and advising getting a CPA.
A friend who owns a small business was audited years ago, he gave the IRS 4 big boxes 7 years of business papers all mixed up and he said that's all I got. A week later the IRS called him and asked him to pick up the boxes. The boxes was not even opened, it was in the same condition as when he dropped them off. He never heard from the IRS again. 🤣
The reason the IRS gave everything back untouched is because paying income tax is voluntary. But hardly anyone knows this. The IRS has the bluff on the majority of the population so it doesn't matter when someone like this slips through the cracks.
My dads friend ran a pizza shop in NYC. An IRS agent stood over his shoulder at the register on a busy day, and extrapolated how much sales tax was owed. Insane.
I don't know if this is a helpful tip for anyone, but a friend of mine has a small business and he pays a set fee every month to an accountant and they input all his receipts and do his accounts monthly. Saves him a lot of stress - he just hands over all his receipts each month or periodically. Most people say they will do it all themselves, but many leave it all until tax time, which is stressful all year as you watch those receipts build up towards tax season....especially me...I'm a procrastinator...yikes. Even just pay a part-timer to scan and enter the receipts for you - that's the worst part...but you're right - A good accountant is worth their weight in gold - they will save you tons of money
Every year, only take 99% of deductions, the other 1% is for audit insurance... pretty cheap for a few bucks a year. IF the auditor ever comes, you start "finding" those deductions you missed for that year... they shut up fast and leave if instead of a check, they could leave with a bill.... with an apology for bothering you.
I've been that guy with a truck and tools for about 4 years now. I can say I've done just about everything when it comes to residential remodeling, interior and exterior. But I've always been an under the table kind of guy. I get 100% disability from the military, my income from that isn't taxed. So I've never dealt with doing taxes. I've always just cashed checks at pls or what not. My jobs are becoming more "Profesional" now and we'll the checks are getting bigger. I'm been a fan of yours for a while now and with a lot of your advice I'm officially launching my business come next year. I just wanted to take some time and appreciate you for the knowledge you've shared and the time you've sacrificed to teach men like myself a thing or two or three or... on how to go about things in this business. Blessings to you and your family.
This is awesome! I would totally let them have all the paper receipts 😂. Regarding audits, they don’t even really look at you if your making under 40K/month, just saying lol. But yes you are 100% correct! Get a good CPA!
Correct, but the IRS also looks for abnormally large deductions that may be uncommon for that tax payer. My sister got audited one year because she made a large donation. They make under $100k.
Unfortunately that is not correct although it may not be common. My husband is a self-employed handyman and we were audited a few years ago and we made under 40,000 that year. It was stressful because it was at a time of a lot of major life changes and health issues which meant that our record keeping was not at its best that year. It was beyond stressful but we survived. Although our records were in disarray we were honest and after examining our records thoroughly we were not penalized. We were doing our taxes ourselves; I highly recommend finding a tax professional that you can trust.
Thats why i do all my jobs under the table, cash prferably, hell i barely make it as it is, wood is so expensive now wire too jesus, thankfully im retired and dont do that many side jobs anymore.
Very illegal... People like me who runs business by the book and pay income taxes, laugh at people who don't. Not too smart on your decision to run an illegal business. Not to mention unprofessional !
Your sitting in headquarters! Two years ago didn’t claim bc I didn’t make that much and was so young(18) but if I could take it back I would have claimed bc it messed me up w loans bc I had no proven income
I'm currently 18 will take your advice and start doing that next year currently gonna just claim my deductions for this year got a new car also some capital gains losses and some other stuff I hate having all this tax bs but.
Business meal deductions were temporarily reinstated to 100% deductible for 2021 and 2022 Glad I kept my notes and receipts for all the business meals in 2021 with my two employees, my 1099 contractors and clients. Tip: My wife runs the books and supply orders. She is a W-2 employee and any meals out, or take out / delivery meals are to discuss operations.
Question here .. So it's ok for you to go to Lowes , Buy say wood for a deck job , Charge the consumer for that wood , Keep the recipe and use it as a write off ?
No, but think of all the things you might not charge for that are expenses. Such as sand paper, caulking, wire nuts or any of the other hundreds of little things that add up.
You don't need that Epson. Smart phone. Google drive. Two clicks and you have you receits stored on Drive, ready cropped and black/white, and contrasted. Boom.
Hello friend have a question can help me how much to charge for a exterior door 48”x80” that a heavy door to the installation and painting. I’m waiting for asking.
How do you depreciate your items? Do you do a straight line or bonus deprecation? I am in college as an accounting and business major. Thinking about starting a business in trades when I am done and am wondering what your accountant recommends for your table saw and such.
I would never recommend the trades to someone with a degree. YOu will be broke and crippled by the time your 50. Go work 40 hours a week as an accountant and enjoy your free time.
@@TheHandymanBusiness I have several degrees (liberal arts, mainly in education), none of which make me as much money as I make as a handyman. Not even close. And I actually enjoy this a lot more.
@@mdtippett I have a IT degree and couldn’t handle working in a cubicle. I work on diesel equipment now and love every second of it. The guys screwing up their bodies are not using the right tools or doing something terribly wrong.
It depends. All the expenses should be categorized. I have an accountant do the books and my taxes. I don't keep receipts. I use one business debit card.
You should sign up with lowes, homedepot, etc. online accounts that way you get all receipts electronically. Then whenever they appear in your mailbox put into a seperate folder titled (receipts for taxes) or something like that. Makes life a lot simpler. Love your channels btw!
It’s rare to get this helpful of advice, I know it’s weird but I really look up to you man thank you for sharing this! I’m a novice woodworker that sells furniture on the side and your videos have helped me a ton.
My CPA hates me lol I don’t/ won’t pay quarterly as I do seasonal work. I am an LLC I do pay my taxes but I don’t stress over things like being on time lol My CPA takes care of the rest I don’t save receipts as they are usually available online. I have a card I use for business expenses and only for that. I don’t even chase slow paying customers, I let my automated email reminders remind them every 2 weeks until they pay and I don’t even bother to stress it. Still at 100% for being paid
Do this by job, property etc. do it monthly to ease workload. Or spend an hour every Saturday morning, that’s what I do, at end of year three hours I’m done. My wife for her business take month and a half to accumulate and categorize her receipts. Big pain.
I'm up every morning entering this stuff into Quickbooks. It's when you want to take out a loan that you realize how important keeping good records really is for the small businessman.
"They do not want Walmart bags full of receipts"......WELL WHO GIVES A CRAP WHAT THEY WANT ? Those bags full of receipts are as legal as your scanned in version.....why make life easy for the IRS ? You force them to spend hours and hours pouring over records and get nothing in return, and they won't bother you in the future.
That's a great idea. Piss off the IRS agents auditing you. Also, those paper receipts fade over time so the records you need may not be readable in a few years and guess what the IRS is going to say about that...
Well, the problem is, you are forced to sit there as they go through all those receipts. I've been there. Mine were in an expandable folder, so at least they were flat. It took 2 days.
The extension is only for filing and not for the balance due. So make sure to pay on time. The failure to file penalties are based on the percentage of the tax due on the 1120-s. You can also always request abatement if you feel it feels under reasonable cause.
Couldn't agree more on having an accountant. I got audited a few years back and couldn't sleep for days, they ended up finding a $32 discrepancy over 5 years of taxes.
Lowes and home depot email receipts. Home depot's pro extra provides complete purchases as well. Hate to say it but we all carry a scanner in our pocket.
Also, if you sign up for a HD account, you can tie your credit card(s) to it, and it will give you your purchase history, along with e-receipts of past transactions. Saved me a few times when I lost a receipt.
Those copy machines are cool but your phone can do all that with no extra equipment. I use the app turbo scan that uses my phones camera. It takes a picture and converts it to a PDF. Thanks for all the killer info you provide. I’m thinking of starting my own channel thanks to your content.
My income for the past 20 years has been from the cap gain on the house I live in. I buy a fixer, move in and fix it up and sell. the cap gain up to $250k is tax free. I've done 3 in 20 years, working on #4 now.
I keep track of my expenses on a spreadsheet on my phone. I immediately tally it up, and put an X at the top of the receipt, so I know it’s counted. I don’t wait until the end of the year. You always have an extra minute to do it right away, rather than a big marathon at tax time. Then I email backups of the spreadsheet to myself ever now and then.
@@tylerblack3508 Google sheets. You can always download a copy as a backup in Microsoft Excel. I have developed all my own spreadsheets over the years. I think they are pretty good. Estimates, timesheets, financial sheets to keep track of profit and sales tax owed. I have a full set of spreadsheets made up to run a business.
The more I watch your videos the more I realize that my house is not in order and I thank you for that! I have a regular day job and have been working nearly every night and weekend as a handy-man/general contractor. With all this work, family life and ADHD (unmedicated) it is extremely hard to find out what I should be doing especially on the bookkeeping part. Great video and love the scanner! Im going to order one. It will be so much easier to keep them sorted on my NAS then to have to go through my shoebox every year at tax time. Thanks for sharing your experiences and advice!
Ever thought about doing a video on health insurance for the self employed? I have a full time job but my side hustle is blowing up. I'm starting to think about my plan to transition and health insurance is a must with three kids. Thanks
I took an accounting class at the tech school this summer purely because the only part of business I put zero effort into before was all the paperwork and receipts for tax season. Now that we’re making more it’s time to care about who’s taking my money! Haha
Audits rarely happen in businesses that make less than 1 million per year. Same goes for individuals making less than 400k a year audits are rare. Not saying you wont get audited
In my experience it's best to have a system of recording tax data ( that works for you ) so at the end of the year you don't have a headache putting it together for your accountant . Every bit of business income and expense should have it's place so that you take advantage of all legal tax deductions. Be sure to pay estimated taxes on time and work with a great accountant . He's worth every penny.
Appreciate all the insight! just starting my flooring / tile business and your videos are enjoyable and have a ton of good helpful tips in them. thank you sir!
I'm an S corp and my wife and I file jointly.... Our tax guy is pushing 80 years old. He's seen it all. He's sharp as a tack. He also lives to have his clients give the gov. $0..... That's all I'm gonna say
Good day handyman. We all just really appreciate you and all you do to help out. In the many ways of running a buisness. All the best and continued success brother 👍
My previous landlord here in Canada is a corporate accountant, and he told me 'you can allow for anything you want, but if Revenue audit you, they might not accept it, and you will have to pay them back - so don't get too creative' LOL E.g. If you have a company car, but it's your ONLY car - they may decide you must use a portion of it for personal use and not allow you to claim all...it's really up to an auditor's discretion
As a CPA that focuses on taxes...this is not bad. Couple of parts are incorrect, but overall not bad. I like that you emphasize making the tax professional a part of the business. Maximize deductions without taking the risk of just deducting everything under the sun.
One only need realize 'taxing' is criminal, a crime, and then If solicited, claim 'justice'. Only slaves (citizens) are obliged to leave a percentage of thy labor.
Funny - I'm an accountant and do the taxes for a bunch of family members (some have small businesses) and for me it's ridiculously easy!! Most non-accountants think it's magic....the black box of accounting. Just like you with your home repair customers. They think you do magic. It's all education and experience, although I'll take on any home repair job too and I love doing them!
I suggest that you use quick books to write your checks and classify your checks into expense accounts as you write them. Always pay for business expenses with a debit card, a check, or a credit card so that you will always have documentation.
ditch the hard drives as primary...get a cloud based storage system (tax deductible). Also the iphone has a 'document scanner' built in...but i do like that little scanner
Agreed. What a nightmare if his laptop catches fire (kinda thing). For all we know he may be using Dropbox, but I'm always surprised by people I know who run businesses that are afraid of storing anything in the cloud. They have this idea that if it's in a cloud, everyone can go there and look at it, and there's nothing you can say to them.
What's worse, the amount of time we have to waste so the government doesn't steal our hard earned money, or the billions of dollars the government wastes to audit and steal from ordinary hard working people? Answer: both.
One last thing. Make it as hard as possible for the auditors. The more resources they waste trying to collect, the less they will audit. Being audited is VERY stressful but so is going to court for a traffic violation. Fighting it gives a better outcome and slows the "road pirates" from bending us business over the barrel too much.
Not true. It’s YOUR problem to prove your deductions with documentation. If you can’t prove it, the IRS doesn’t allow it. And if your receipts aren’t reasonably well organized, they just reject them. Been there. 🙁
I charge all my business expenses to my business debit card. I get an annual summary broken down by category/business name and each charge is listed and is totaled at the bottom of each category. I simply use these numbers for my tax return. The one audit I had, I was informed by the IRS auditor that this was acceptable. I didn't need every individual receipt. In regards to tracking mileage, I was told that if I tracked mileage once a month each quarter and averaged my annual mileage based on those numbers, that was acceptable too. Maybe he was a lenient auditor but Ive been doing this for years now and no issues.
You gotta wonder how much money they waste on IRS having to navigate through this murky tax code? They would probably save billions of dollars and hours by just simplifying the hell out of the tax code.
Why did you switch from LLC to S Corp? I am in TX and will roll my sons pressure washing under my new business. His is just a name (well recognized) and not a formal business. Was thinking LLC for our joint venture. Thoughts?
Handyman, I swear I love your videos and watch both of your channels, but I'm gonna lose it if you can't stop saying HEY GOOGLE so loud in your workshop that my speakers answer your questions also. Thanks.
Wanting to start my own handyman company… this is the most nerve wracking part for me… TAXES!!! I’m not sure if while I make the move to starting an LLC if I should look into getting an accountant.
Deal with customers, go see what supplies are needed, go buy supplies, do the work while being responsible for whatever may go wrong, keep receipts, write an invoice, deduct materials from income. It’s all too much work for what. Some illegal immigrant who only takes cash?
Taxes are optional, do not incorporate. Do not contract with the IRS and you will never have to pay them. Look up the definition of tax in blacks law dictionary ( a gift imposed )
Fujitsu scansnap and Evernote are significantly better. Evernote had a bundle edition too I believe same scanner but I would get the Fujitsu separately.
You can't do both vehicle depreciation and mileage. One or the other for the work truck /van. Once your vehicle is depreciated you can take mileage. My last work truck I was tracking mileage. Another way to reduce your taxable income is by opening a SEP IRA. Once you do your taxes you will know how much you made. You can put up to 25% of your income into that SEP.
I disagree
Well you don't know what you are talking about buddy. You can't do both.
@@TheHandymanBusiness I think you got talking to fast and forgot to say it's one or the other. That's why you always say to check with a tax professional. 💲💲🦌
Thank you for explaining all of this!
I just did an extension for now so I have more time to figure out what I'm doing.
You're a really good man bro. I don't have anyone to teach me this. Wasn't taught much at all from my parents growing up so I'm out here learning it all myself on everything. So videos like these really save me. Especially in the future! I know it's a headache trying to make sure you're always doing all this right but man it's so much better knowing I can go go to bed in peace not wondering when the IRS is coming for my assest. The receipt printer alone is a savior. Not including the tax advice and advising getting a CPA.
How you making out now?
A friend who owns a small business was audited years ago, he gave the IRS 4 big boxes 7 years of business papers all mixed up and he said that's all I got. A week later the IRS called him and asked him to pick up the boxes. The boxes was not even opened, it was in the same condition as when he dropped them off. He never heard from the IRS again. 🤣
Excellent idea!!! 😎👍
The reason the IRS gave everything back untouched is because paying income tax is voluntary. But hardly anyone knows this. The IRS has the bluff on the majority of the population so it doesn't matter when someone like this slips through the cracks.
Sure it’s a good story for a comedy club, but in real life it just doesn’t work like that:(
and then everyone stood up and clapped.
My dads friend ran a pizza shop in NYC. An IRS agent stood over his shoulder at the register on a busy day, and extrapolated how much sales tax was owed. Insane.
I don't know if this is a helpful tip for anyone, but a friend of mine has a small business and he pays a set fee every month to an accountant and they input all his receipts and do his accounts monthly. Saves him a lot of stress - he just hands over all his receipts each month or periodically.
Most people say they will do it all themselves, but many leave it all until tax time, which is stressful all year as you watch those receipts build up towards tax season....especially me...I'm a procrastinator...yikes.
Even just pay a part-timer to scan and enter the receipts for you - that's the worst part...but you're right - A good accountant is worth their weight in gold - they will save you tons of money
Every year, only take 99% of deductions, the other 1% is for audit insurance... pretty cheap for a few bucks a year. IF the auditor ever comes, you start "finding" those deductions you missed for that year... they shut up fast and leave if instead of a check, they could leave with a bill.... with an apology for bothering you.
I've been that guy with a truck and tools for about 4 years now. I can say I've done just about everything when it comes to residential remodeling, interior and exterior. But I've always been an under the table kind of guy. I get 100% disability from the military, my income from that isn't taxed. So I've never dealt with doing taxes. I've always just cashed checks at pls or what not. My jobs are becoming more "Profesional" now and we'll the checks are getting bigger. I'm been a fan of yours for a while now and with a lot of your advice I'm officially launching my business come next year. I just wanted to take some time and appreciate you for the knowledge you've shared and the time you've sacrificed to teach men like myself a thing or two or three or... on how to go about things in this business. Blessings to you and your family.
Thank you Alex Rosas, the IRS will be in touch.
@@Discophreak haha..
@@alexrosas8628 just kidding...good luck with your new business my friend
will you lose your disabilty pay for being 100% disabled but and working full time as a handyman?
@@ScreamingEagleFTW no Im total and permanent and allowed to work.
This is awesome! I would totally let them have all the paper receipts 😂. Regarding audits, they don’t even really look at you if your making under 40K/month, just saying lol. But yes you are 100% correct! Get a good CPA!
Correct, but the IRS also looks for abnormally large deductions that may be uncommon for that tax payer. My sister got audited one year because she made a large donation. They make under $100k.
lol right? "The IRS hates walmart bags full of receipts" well, I hate being audited so...
Unfortunately that is not correct although it may not be common. My husband is a self-employed handyman and we were audited a few years ago and we made under 40,000 that year. It was stressful because it was at a time of a lot of major life changes and health issues which meant that our record keeping was not at its best that year. It was beyond stressful but we survived. Although our records were in disarray we were honest and after examining our records thoroughly we were not penalized. We were doing our taxes ourselves; I highly recommend finding a tax professional that you can trust.
Thats why i do all my jobs under the table, cash prferably, hell i barely make it as it is, wood is so expensive now wire too jesus, thankfully im retired and dont do that many side jobs anymore.
Problem you can run into is you may not report the cash but if the client reports it as an expense then it comes back to you.
@@crazymanincincy also, it’s illegal.
If the state come and does a lifestyle audit you gonna be doing alot of explaining.
Very illegal...
People like me who runs business by the book and pay income taxes, laugh at people who don't. Not too smart on your decision to run an illegal business. Not to mention unprofessional !
Your sitting in headquarters! Two years ago didn’t claim bc I didn’t make that much and was so young(18) but if I could take it back I would have claimed bc it messed me up w loans bc I had no proven income
I'm currently 18 will take your advice and start doing that next year currently gonna just claim my deductions for this year got a new car also some capital gains losses and some other stuff I hate having all this tax bs but.
Business meal deductions were temporarily reinstated to 100% deductible for 2021 and 2022
Glad I kept my notes and receipts for all the business meals in 2021 with my two employees, my 1099 contractors and clients.
Tip: My wife runs the books and supply orders. She is a W-2 employee and any meals out, or take out / delivery meals are to discuss operations.
Thanks for the info. That's good news.
You could also just open a separate credit or debit account to do manage your expenses. No need to keep receipts.
They actually don't need individual receipts. Credit Card and Bank Statements are enough for a small business.
Question here .. So it's ok for you to go to Lowes , Buy say wood for a deck job , Charge the consumer for that wood , Keep the recipe and use it as a write off ?
The payment from the customer would bring one and the expense would offset that income for a net zero, unless you discharge on supplies.
No, but think of all the things you might not charge for that are expenses. Such as sand paper, caulking, wire nuts or any of the other hundreds of little things that add up.
And it's going to get tougher for small businesses and the middle class as a whole soon.
Convert some fiat to crypto, dollar losing value.
My advice is to pay your account on a monthly basis before he hits you up with a big invoice at the end of the year for his work
You don't need that Epson. Smart phone. Google drive. Two clicks and you have you receits stored on Drive, ready cropped and black/white, and contrasted. Boom.
Screwed up on my taxes and it cost me 25k for 50k mistake Oregon sucks
Thank you for your time to help us 💪😎👍
My pleasure!
Don't forget to include the money from Epson/influender as part of your income.
Hello friend have a question can help me how much to charge for a exterior door 48”x80” that a heavy door to the installation and painting. I’m waiting for asking.
Why not deduct 100% of truck purchase in the first year? Buy a new truck every year and get $60k deducted every year
I'll give them a Walmart bag 🎒 :D
Do you back up everything on flash drive just in case?
How do you depreciate your items? Do you do a straight line or bonus deprecation? I am in college as an accounting and business major. Thinking about starting a business in trades when I am done and am wondering what your accountant recommends for your table saw and such.
I would never recommend the trades to someone with a degree. YOu will be broke and crippled by the time your 50. Go work 40 hours a week as an accountant and enjoy your free time.
@@TheHandymanBusiness I have several degrees (liberal arts, mainly in education), none of which make me as much money as I make as a handyman. Not even close. And I actually enjoy this a lot more.
@@mdtippett I have a IT degree and couldn’t handle working in a cubicle. I work on diesel equipment now and love every second of it. The guys screwing up their bodies are not using the right tools or doing something terribly wrong.
@@TheHandymanBusiness GREAT and HONEST advice!!!
F the irs, let them sift through the damn walmart bags of receipts.
hey guys--if you pay for every biz expense on your biz credit card would that be enough of a record for tax purposes?
It depends. All the expenses should be categorized. I have an accountant do the books and my taxes. I don't keep receipts. I use one business debit card.
How do you decide what to pay yourself? I always owe income tax so I think I will owe less if I treat myself as an employee.
There is a minimum percentage that I have to take and pay full taxes on. My accountant handles that.
I do my app scanning 😂😂😂
Printer scanner makes me feel sluggish
13:08 oh God I saw it move!
DONT wear a shirt with a firearm print on it while promoting epson or you’ll be axed to pull the video 🤑🤣😂😆
499 scanner LOL
Handymamny procrastinng
Pounds and pounds of propane
You should sign up with lowes, homedepot, etc. online accounts that way you get all receipts electronically. Then whenever they appear in your mailbox put into a seperate folder titled (receipts for taxes) or something like that. Makes life a lot simpler. Love your channels btw!
Welcome to the #1 home improvement onlyfans in the WORLD!
Don't forget. Those subscription are tax deductible for market research. 😉
Just cause he plays with his caulk doesn't make it onlyfans-esque 🤣
It’s rare to get this helpful of advice, I know it’s weird but I really look up to you man thank you for sharing this! I’m a novice woodworker that sells furniture on the side and your videos have helped me a ton.
Glad I could help!
My CPA hates me lol
I don’t/ won’t pay quarterly as I do seasonal work. I am an LLC
I do pay my taxes but I don’t stress over things like being on time lol
My CPA takes care of the rest
I don’t save receipts as they are usually available online.
I have a card I use for business expenses and only for that.
I don’t even chase slow paying customers, I let my automated email reminders remind them every 2 weeks until they pay and I don’t even bother to stress it. Still at 100% for being paid
That’s a good way to do business. Stress will never solving anything.
Do this by job, property etc. do it monthly to ease workload. Or spend an hour every Saturday morning, that’s what I do, at end of year three hours I’m done.
My wife for her business take month and a half to accumulate and categorize her receipts. Big pain.
I'm up every morning entering this stuff into Quickbooks. It's when you want to take out a loan that you realize how important keeping good records really is for the small businessman.
"They do not want Walmart bags full of receipts"......WELL WHO GIVES A CRAP WHAT THEY WANT ? Those bags full of receipts are as legal as your scanned in version.....why make life easy for the IRS ? You force them to spend hours and hours pouring over records and get nothing in return, and they won't bother you in the future.
That's a great idea. Piss off the IRS agents auditing you. Also, those paper receipts fade over time so the records you need may not be readable in a few years and guess what the IRS is going to say about that...
Well, the problem is, you are forced to sit there as they go through all those receipts. I've been there. Mine were in an expandable folder, so at least they were flat. It took 2 days.
As much as I agree with your sentiment, unfortunately the IRS can do a lot more to make your life difficult than you can do to them.
It’s not how much you make, it’s how much you keep.
Chapter 3. Lesson 1.
It's also how you keep it. Keeping it doesn't mean taxable.
It's a combo of both lol
So if I make $5 a year and keep all of it I’m winning
I'm an S-Corp too. I have learned, don't be late with the corporation tax filing or it's a $1500 penalty...😇
I always get an extension for my corporate taxes.
The extension is only for filing and not for the balance due. So make sure to pay on time. The failure to file penalties are based on the percentage of the tax due on the 1120-s. You can also always request abatement if you feel it feels under reasonable cause.
Mine was 800 last year but since it was my first time they let me off. They said to me on the phone "the IRS only does this once" lol
@@crazymanincincy Why would you owe them any taxes? Time to get a new accountant.
So apparently I owe them 4k in late fees and interest on an 800 dollar balance. Ridiculous
Couldn't agree more on having an accountant. I got audited a few years back and couldn't sleep for days, they ended up finding a $32 discrepancy over 5 years of taxes.
Lowes and home depot email receipts. Home depot's pro extra provides complete purchases as well. Hate to say it but we all carry a scanner in our pocket.
Great point.
Also, if you sign up for a HD account, you can tie your credit card(s) to it, and it will give you your purchase history, along with e-receipts of past transactions. Saved me a few times when I lost a receipt.
Problem is, they sometimes give you paper receipts instead. Throws off your mojo if you've been tracking digital ones
@@agrarianriverman I use QuickBooks online and can take photo of receipt and it saves it along with all my other accounting info. It's great.
@@intentionalmoneymn4572 Just downloaded Quick books Self Employed app and I’m gonna give it a try
Keep your books as tight and right as your kit. Then hire someone who’s an expert to handle yours so you can handle yours.
Those copy machines are cool but your phone can do all that with no extra equipment. I use the app turbo scan that uses my phones camera. It takes a picture and converts it to a PDF. Thanks for all the killer info you provide. I’m thinking of starting my own channel thanks to your content.
My income for the past 20 years has been from the cap gain on the house I live in. I buy a fixer, move in and fix it up and sell. the cap gain up to $250k is tax free. I've done 3 in 20 years, working on #4 now.
Damn that’s smart. Thanks for the idea.
I keep track of my expenses on a spreadsheet on my phone. I immediately tally it up, and put an X at the top of the receipt, so I know it’s counted. I don’t wait until the end of the year. You always have an extra minute to do it right away, rather than a big marathon at tax time. Then I email backups of the spreadsheet to myself ever now and then.
What app do you use for your spreadsheet?
@@tylerblack3508 Google sheets. You can always download a copy as a backup in Microsoft Excel. I have developed all my own spreadsheets over the years. I think they are pretty good. Estimates, timesheets, financial sheets to keep track of profit and sales tax owed. I have a full set of spreadsheets made up to run a business.
@@lukebrown4184 do you mind Sharing what you created so others can get an idea of how to do this?
One of the main reasons I love shopping home depot is the automatic, in-store purchase e-receipts. As long as you use a registered CC.
Yeeeeessssss!
+1
The more I watch your videos the more I realize that my house is not in order and I thank you for that!
I have a regular day job and have been working nearly every night and weekend as a handy-man/general contractor.
With all this work, family life and ADHD (unmedicated) it is extremely hard to find out what I should be doing especially on the bookkeeping part.
Great video and love the scanner!
Im going to order one. It will be so much easier to keep them sorted on my NAS then to have to go through my shoebox every year at tax time.
Thanks for sharing your experiences and advice!
The tip on turning a vacation into a business trip was brilliant, will definitely be researching that further!
Ever thought about doing a video on health insurance for the self employed? I have a full time job but my side hustle is blowing up. I'm starting to think about my plan to transition and health insurance is a must with three kids. Thanks
Only fans!!! Hahahaha!!!!!! You have a great sense of humor Handydude-one of the many reasons I enjoy your videos.
I appreciate that!
Yes, the more dry humor the better
I like the squeaky voiceovers.
@@jasonkeller5732 Yes
I took an accounting class at the tech school this summer purely because the only part of business I put zero effort into before was all the paperwork and receipts for tax season. Now that we’re making more it’s time to care about who’s taking my money! Haha
How you making out now?
Audits rarely happen in businesses that make less than 1 million per year. Same goes for individuals making less than 400k a year audits are rare. Not saying you wont get audited
If I make like 30 thousands at year what will happened
I was audited 2 years into my wage earning years. I made 16k that year.
Thanks for the videos. Went from guy and a truck to a class c. My prices went up and I'm making way more money. Your channel helped motivate me. 👊
Class c?
@@roberth7559 - I am thinking Mercedes???😏☺️❤️
@@roberth7559
C corp
Thank you so much for producing a genuine, down to earth, and helpful video. (And thoughtfully edited, BTW.)
Authenticity is a rarity these days.
In my experience it's best to have a system of recording tax data ( that works for you ) so at the end of the year you don't have a headache putting it together for your accountant . Every bit of business income and expense should have it's place so that you take advantage of all legal tax deductions. Be sure to pay estimated taxes on time and work with a great accountant . He's worth every penny.
Taxidermy being a business expense 👍👌 that was awesome.
Appreciate all the insight! just starting my flooring / tile business and your videos are enjoyable and have a ton of good helpful tips in them. thank you sir!
There is no law that Requires Americans to File and pay an income tax.
-Milton William Cooper
I'm an S corp and my wife and I file jointly.... Our tax guy is pushing 80 years old. He's seen it all. He's sharp as a tack. He also lives to have his clients give the gov. $0..... That's all I'm gonna say
I feel like my accountant works for the irs
Love it. “That’s my story sticking to it” 🤣
Good day handyman. We all just really appreciate you and all you do to help out. In the many ways of running a buisness. All the best and continued success brother 👍
My previous landlord here in Canada is a corporate accountant, and he told me 'you can allow for anything you want, but if Revenue audit you, they might not accept it, and you will have to pay them back - so don't get too creative' LOL
E.g. If you have a company car, but it's your ONLY car - they may decide you must use a portion of it for personal use and not allow you to claim all...it's really up to an auditor's discretion
"Up to an auditors discretion" well that's good. Base the results of your audit on the auditors mood. Quite the racket they're running ;)
You can take pictures with your phone to turn them into pdfs
As a CPA that focuses on taxes...this is not bad. Couple of parts are incorrect, but overall not bad. I like that you emphasize making the tax professional a part of the business. Maximize deductions without taking the risk of just deducting everything under the sun.
Bummer with paying no taxes from income is that it makes getting a bank loan dang near impossible lately.
If you're an S Corp employee with a small w2d check.
@@anthonygriffin1147 also report income on a K1 and take the loan based on the business
@@crazymanincincy unless the k1 shows a loss.
@@anthonygriffin1147 yeah there is that lol
File a tax return showing income for the bank and then amend it and take all your deductions you usually would
If u work for the irs u should feel ashamed and go step in front of traffic
@The Handyman Business u been watching too much Tim pool and not enough Alex Jones lmao
I agree
One only need realize 'taxing' is criminal, a crime, and then If solicited, claim 'justice'. Only slaves (citizens) are obliged to leave a percentage of thy labor.
Only those who are truly awake understand that taxation is theft
Funny - I'm an accountant and do the taxes for a bunch of family members (some have small businesses) and for me it's ridiculously easy!! Most non-accountants think it's magic....the black box of accounting. Just like you with your home repair customers. They think you do magic. It's all education and experience, although I'll take on any home repair job too and I love doing them!
Sorry for bothering you, but do you have a book you recommend learning from?
Absolutely correct on needing an accountant. Don’t mess around. Get an accountant if your a small business.
I suggest that you use quick books to write your checks and classify your checks into expense accounts as you write them. Always pay for business expenses with a debit card, a check, or a credit card so that you will always have documentation.
Reduce your taxable income by giving a 10% discount for cash payments. I know, Boom !!! .... Mind Blown !!!, right?
just started a biz, although i' have been doing this for 20 years or more as weekend side jobs
but the hoops you have to go through , man i feel ya
Instead of using the Epson. I could download a free scanning PDF app on my iPad and then have it transferred over to my Mac and iPhone. Way easier
If you don't ask the right questions your tax guy wont give you the answer.
ditch the hard drives as primary...get a cloud based storage system (tax deductible). Also the iphone has a 'document scanner' built in...but i do like that little scanner
Agreed. What a nightmare if his laptop catches fire (kinda thing). For all we know he may be using Dropbox, but I'm always surprised by people I know who run businesses that are afraid of storing anything in the cloud. They have this idea that if it's in a cloud, everyone can go there and look at it, and there's nothing you can say to them.
IRS has entered the chat, again
I think I am going to start a handywoman side business:))) Thanks for the info!👍
Are tools deductable? I need allot of different tool all the time and this is going to be my first year filing my taxes as a sole proprietor.
Yes, most are.
Need find me a tax professional I reckon
What's worse, the amount of time we have to waste so the government doesn't steal our hard earned money, or the billions of dollars the government wastes to audit and steal from ordinary hard working people? Answer: both.
One last thing. Make it as hard as possible for the auditors. The more resources they waste trying to collect, the less they will audit.
Being audited is VERY stressful but so is going to court for a traffic violation. Fighting it gives a better outcome and slows the "road pirates" from bending us business over the barrel too much.
good outlook. i like a guy that goes to court for a traffic violation rather than just waive it and pay the fine
Not true. It’s YOUR problem to prove your deductions with documentation. If you can’t prove it, the IRS doesn’t allow it. And if your receipts aren’t reasonably well organized, they just reject them. Been there. 🙁
The IRS is useless. Flat tax across the board is the way to go. Tiers=%
It's "ordinary" and "reasonable" for me to have a .50BMG Barrett with 1000 rounds of ammo as a "security system".
Yes. You can also write off dog food for your guard dog.
@@TheHandymanBusiness God Bless America!
@@TheHandymanBusiness Unless you own a chocolate Lab.....the auditor be like That ain't no guard dog!
When they show up at the door There will be no questions. She is a killer.
Welcome to the number one home improvement business youtube channel in the whole world.
@The Handyman Business pocket dial?
5% of the tax code tell yoI what taxes you have to pay, the other 95% tells you how to not pay taxes, and most of those things require a business.
If you spouse helps you in your business, hire them as an employee! The amount you pay to them is not taxable income
It is if you file married and jointly
I charge all my business expenses to my business debit card. I get an annual summary broken down by category/business name and each charge is listed and is totaled at the bottom of each category. I simply use these numbers for my tax return. The one audit I had, I was informed by the IRS auditor that this was acceptable. I didn't need every individual receipt. In regards to tracking mileage, I was told that if I tracked mileage once a month each quarter and averaged my annual mileage based on those numbers, that was acceptable too. Maybe he was a lenient auditor but Ive been doing this for years now and no issues.
Taxes are BS with all the loop holes. A flat tax or no tax.
You gotta wonder how much money they waste on IRS having to navigate through this murky tax code? They would probably save billions of dollars and hours by just simplifying the hell out of the tax code.
Why did you switch from
LLC to S Corp? I am in TX and will roll my sons pressure washing under my new business. His is just a name (well recognized) and not a formal business. Was thinking LLC for our joint venture. Thoughts?
Handyman, I swear I love your videos and watch both of your channels, but I'm gonna lose it if you can't stop saying HEY GOOGLE so loud in your workshop that my speakers answer your questions also.
Thanks.
I thuoght all earnings under-the-table are exempt from the IRS?
Wanting to start my own handyman company… this is the most nerve wracking part for me… TAXES!!! I’m not sure if while I make the move to starting an LLC if I should look into getting an accountant.
Deal with customers, go see what supplies are needed, go buy supplies, do the work while being responsible for whatever may go wrong, keep receipts, write an invoice, deduct materials from income. It’s all too much work for what. Some illegal immigrant who only takes cash?
Taxes are optional, do not incorporate. Do not contract with the IRS and you will never have to pay them. Look up the definition of tax in blacks law dictionary ( a gift imposed )
Taxidermy! Subscriber for life now. Lol. Thanks for the tips.
Hey handyman, keep doing what you’re doing!
Fujitsu scansnap and Evernote are significantly better. Evernote had a bundle edition too I believe same scanner but I would get the Fujitsu separately.