I would think Postage stamps, if you have to overnight something somewhere, that receipt could go into that folder. If you don't have one for like a folder for Advertising, you could put receipts in that from ordering them and such. Otherwise, I have no idea. It's a good question.

Shane,

im not a CPA but i do believe that your example of how taxes work is correct. the more money you can deduct, the lesser of an amount that the IRS can consider your income, in return you get taxed on a lesser amount. i wonder if you deduct say $40k from $100k if the IRS would consider you in a tax bracket for $60k or stay in the same tax bracket for the $100k? hmmmmmmmm.

Question on Internet Access - can you deduct the entire amount or just the percentage you use for business?

Thanks.

:rolleyes: With the help of my fellow agents, I'll find out what is deductable and what is not, hence the reason for this post. Beyond that, I have no problems with preparing my own returns...I always have and always will. You may like paying for a service you don't need, but I don't.

Okay, I thought I had got the most of it right, I'm still unsure about the refund checks people get, but I guess I'll find out sooner or later. LoL! Thanks!

I posted this on another thread, just wanted to make sure it reached the people interested.

Here is a link to a snapshot that might help:

http://www.selfemployedweb.com/business-expense.htm

Here is the actual IRS Info on it:

http://www.irs.gov/publications/p535/index.html
Now that IRS link is for the 2004 Return FYI.

The IRS is, of course, the best free method of finding what qualifies as an allowable deduction. Jasondt2001's post is a good publication from the IRS, but they have many others that may cover other deductions you may have. The best bet is to visit the IRS website and review all of the publications they have and see what may apply to you.

http://www.irs.gov/formspubs/article/0,,id=98171,00.html

One other thing to keep in mind. Many things, such as your computer or cell phone, MAY be deductable, but not always 100%. If you split the use of the item between your business and personal life, you will only get a partial deduction on your business taxes.

For example, if you have a digital camera you use to photograph listings, you may be able to deduct it as a business expense. However, if you claim it @ 100%, you better have a second camera you use on family vacations to show the IRS should they audit you.

While I often do my own taxes, the use of a CPA could be very valuable to you. After all, the hours you spend trying to determine what is an allowable deduction, reading the publications, etc. could be spent selling another house. Opportunity costs are high when doing your own taxes.

This is a great post that I've been looking for. Does anyone know if you can deduct business clothing? I've heard yes and no, but nothing concrete. I just started last year, and I had to buy all new business clothing (mostly suits) since I didn't have anything like that before. Thank you.

I had no idea there were so many PYOTs in here. Personally, it makes sense to me to pay a CPA. I figure I make more per hour than my CPA. It would take me AT LEAST 8 hours to prepare my own taxes and I'd most likely miss alot. I own rental properties and have another business in addition to being an agent.


PYOT - Prepare Your Own Taxes
A second cousin to the FSBO

Well, some of us are just getting started, so we can't afford CPAs. Some may be making more than CPAs/hour, but some of us don't. This was my first year, and I didn't get to do as well as others who could afford that luxury. I'm not exactly like a FSBO (or second cousin), I'm not trying to save money, I don't have it to spend. So if someone who knows the answer to my question can actually help me out, I would greatly appreciate it. Thank you.

Special Agent MacBride, I think the money spent on a cpa is well worth it. Let me give you a good example of how a good cpa can make all the difference.

Last year my managing broker/brother made 164,000. He paid 30,000 in taxes (because he had a bad cpa). This year he spent the money on the best cpa around and made 153,000. He is paying 800 dollars in taxes this year. I made 48,000 dollars and am getting a tax refund.

My 2 cents is spend the money and find a good CPA let them tell what you can and cant right off.

Just imagine, this whole thread could be a moot point and April 15 would be just another day!

http://www.fairtax.org


Tell your friends and family! Tell your representatives and your senators!

I agree, get a CPA. Before getting into Real Estate I worked for 5 Years at a CPA Firm preparing taxes.

Up until this year, I have always done my own taxes. In 2005 though (My 1st Full Year) I grossed around 40K and did not pay 1 dime to the IRS. My husband is also self-employed, and he paid NO taxes either.

I prepared my taxes myself and found I owed around $4K in Income & Self Employment taxes.

Not satisfied. I took everything to the CPA firm whom which I worked for in the past....

Results: A $396 Refund. Cost: $190

So you see, it might actually COST you money not to use one. It almost cost me $4000 and I know all the deductions. There is more to it than just Deductions. It is how you use them & where you use them!! No one can prepare your taxes better than a CPA, it is their business.

Previously you stated that that you didn't want to pay for services you don't need because you can do it yourself. Not trying to be rude here, but you kind of sound like a Stubborn FSBO.

If you truly believe you can net a FSBO more money because you are an experienced professional, would seem to me a CPA can do the same!! Use one, they are well worth the couple hundred dollars!

I'm not sure if the last two paragraphs were for me, but I never said I didn't need their services, i said I couldn't AFFORD their services. Trust me, if I could, I would go in a heartbeat, but unfortunately I seriously don't have the money.

Cheifnet,

No it was not you that said this, it was the original poster, Macbride:

"With the help of my fellow agents, I'll find out what is deductable and what is not, hence the reason for this post. Beyond that, I have no problems with preparing my own returns...I always have and always will. You may like paying for a service you don't need, but I don't."

But have you ever prepared a Schedule C and dealt with Self-Employment issues? I would gather the answer is "no" or you would already know what is deductible. Please consider getting a CPA.