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Chickenhauler 07:31 AM 12-02-2009
Originally Posted by mac60:
Yea, I know there are tax write offs, I have been doing this for over 10 years. My point was that my day does not end at 5:15 when the kids leave. I/We pay expenses that I am sure the parents don't even think about. Yea, I may get to write off food at the end of the year, but I still have to buy it throughout the year. So while the deductions at the end of the year are nice, I still have to pay my utility bill, buy groceries, pay the insurance premium, put gas in my car to go buy the groceries.

And my accountant has told me, you never want to have a consistent loss, that raises lots of red flags.

If your wife does dc, I would think you of all people would understand what it cost to run a dc week to week. Just last week alone I made a purchase for dc, a kitchen set that cost me $85. Yea, I will be able to deduct that, but I still had to have the cash to pay for it at the store, and make the house payment, buy groceries, pay the electric biill, etc etc. Bottom line is, we put a lot of our income back into the business and the parents don't realize it, or want to understand it. They must think the grocery fairy stops by once a week and drops off food.
Yup, welcome to operating a small business. You have to think of it as a business, not a job.

DC costs vs expenses, they are quite profitable (the margin) compared to many other small business's. My trucking eats over 50% of it's revenue in fuel alone, and that's before equipment purchase and upkeep, wages, insurance, licensing, etc. Let's not even start on farming..........



Originally Posted by :
And my accountant has told me, you never want to have a consistent loss, that raises lots of red flags.
Our accountant says to write it down to the point where you owe a pittance in taxes, but not show a loss.

Even if you show a loss and throw all kinds of red flags, if all your deductions are legit and all your "T's" are crossed, let them bring the audit. I went through two audits back to back about 8 years ago, and in the end, the IRS employees only gained a paycheck, the IRS gained nothing.
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