Tax write offs

[Gabe]

Well, I haven't paid the government is about 5 years due to my research on taxes and owning a business. I've filed every year, but have shown a negative income or been below the poverty level - all by playing by their rules.

Here's my plan for this little hobby. Since everything bought for a business is considered a tax write off, I'm going to file a Doing Business As (DBA) with the City and call it "Gabe's Heli Training" or something like that. Now there's a record of me being a sole proprietorship.

Next, I will take my DBA sheets down to the bank and start an account under my business name. Every time I purchase a heli or heli part it will be from that account. Deposits can even be transfers from my personal checking and are considered "loans" to your business - which are liabilities - which are write offs ;D

It would be wise to attempt to make some income by training a friend or two for a small fee. This way there is some record of income and the IRS doesn't misconstrue your good intentions of helping the economy as tax evasion.

Like I said, five years and no taxes for me. I've had a negative income or came out below the poverty level.

And since nobody's perfect, I have to put this disclaimer so no one sues me if something goes wrong:

These statements are not to be construed as tax advice. They are for entertainment purposes only.

[Gabe]

Ha ha! I have to laugh as I post this. I was reviewing my first post and looked at the ad above - it was for tax advice. Gotta love it!

[McKrackin]

Play the game brother ;D

[kiwi1080]

I need a job first before I can start evading tax payments!! Its great that the government will give me a SS number and want to take my money but it takes a lot longer to get a drivers license, go figure!!

[mightyxxwhitey]

Gabe I kinda had something similar and was told that sometimes the IRS will do in audit on you if you keep showing a loss. Just looking out for a brother.

[ranben]

Hmmmmmmmmm..........its hard to stay in business if you show a loss five years in a row, unless you can show you have deep pockets. If you show a loss and show bank deposits into your personal account, they will catch on sooner or later. I think I would show a profit pretty soon, but thats just me. I dont want to get into a pissing contest with an IRS auditor. They can take stuff!!!

[akphill]

I agree uncle audits me about every three years trying to catch me doing something wrong he actually got a whole whopping 800 back from me one year so be carefull ( yeah it suck's being me sometimes)

[19000rpm]

You can do anything until the audit mkan shows up and then anything can happen. If you have really pissed them off they can go back 4 years and slap the dreaded AMT basically removing any and all deductions. That usually amounts to a significant amount of back taxes which will be in arears and come with penalties and interest.

Happy landings

[akent]

The IRS is more interested in big money.
That said, they will nail the little guy, if it's blatantly fraudulent. You just have to find that fine line.

The IRS uses computers to kick out returns that don't make sense. Negative incomes or near zero incomes are scrutinized more heavily than folks that pay something. The folks they really go after are non-filers.

I actually have a schedule C that I put all of my computer, test equipment, and parts into, even though I am full time employed. That allows me to write off all of this stuff. What I do though is actually use this stuff to make money. I design things for people for a fee. This goes into my bank account and is netted against this.
This is Ok. They don't bother me. From this, I have losses on my schedule C, but not overall.

Anyway, I have it a little easier, as my wife is an ex-IRS agent and also a CPA! She knows what we can and can't get away with. I just leave all of that with her.
She worked on large corporate accounts, still in business with years of losses! It's amazing what a smart CPA can find in a corrupt company in a couple of days!

My grandfather was involved in one of the largest tax fraud cases in American history. When my wife went to work there, the older bosses all knew the name and asked her if she was related. Unfortunately, she had to answer yes! Yep, my grandfather's partner went to prison for two years and was killed upon exiting. My grandfather died poor after paying back everything, but he didn't go to prison. My father was also implicated, but was never tried. He was a lowly thing on that totem pole.

Best,
Kent

[19000rpm]

Good advice and a great story kent.

Happy landings

[rtfheli]

Don't post anything on the web that can be incremenating. You never know if the IRS is watching or use this info against you. So don't post anything that could hurt you including this forum.

[Gabe]

Good point RTF. That's why I stated it was for entertainment purposes only. Everything I posted is by the books - their books. As Akent said, a good CPA will really help. I pay about $500 a year to my CPA. Its worth it to know that its his license on the line.

Well, that's that boys! Back to flying my toys!

[BTCat]

May 28, 2009 19:41:42 GMT -6 akent said:

The IRS is more interested in big money.
That said, they will nail the little guy, if it's blatantly fraudulent. You just have to find that fine line.

The IRS uses computers to kick out returns that don't make sense. Negative incomes or near zero incomes are scrutinized more heavily than folks that pay something. The folks they really go after are non-filers.

I actually have a schedule C that I put all of my computer, test equipment, and parts into, even though I am full time employed. That allows me to write off all of this stuff. What I do though is actually use this stuff to make money. I design things for people for a fee. This goes into my bank account and is netted against this.
This is Ok. They don't bother me. From this, I have losses on my schedule C, but not overall.

Anyway, I have it a little easier, as my wife is an ex-IRS agent and also a CPA! She knows what we can and can't get away with. I just leave all of that with her.
She worked on large corporate accounts, still in business with years of losses! It's amazing what a smart CPA can find in a corrupt company in a couple of days!

My grandfather was involved in one of the largest tax fraud cases in American history. When my wife went to work there, the older bosses all knew the name and asked her if she was related. Unfortunately, she had to answer yes! Yep, my grandfather's partner went to prison for two years and was killed upon exiting. My grandfather died poor after paying back everything, but he didn't go to prison. My father was also implicated, but was never tried. He was a lowly thing on that totem pole.

Best,
Kent

Now let me get this right. There is an IRS agent/CPA and engineer living in the same house? Good night, Kent. I bet between the two of you, you could each swallow a penny and squeeze out 50 feet of copper wire ;D ;D

[Gabe]

LOL!

;D ;D

[19000rpm]

Probably the wire be mic'd to less than a 1000th + or - and fully deductible. Sorry, kent just couldn'r resist. ;D

Happy landings