What Should I charge people?

[Dobermann]

I was grumbling to my accountant about the tax I was going to have to pay on some transaction and his reply to me was "Yes, they will tax you but they never take all of it.....at least not yet." So, undercharging for you work is a pretty naive way of tax avoidance. Charge what you're worth and pay the tax you owe. Your accountant (you should have an accountant if you're in business) can help you over the rough spots and keep them from "taking it all."

[Arizona Joe]

I want to go legit but here is my theory...I had to work my *** off to save enough money to buy equipment, a truck, and paying for living expenses while being taxed. And now the government gets to double tax me for everything that I have accomplished? To **** with that. Its Un-American and I will not Stand for it. I do not want to go into politics, this is a welding forum. And I Guaran-god****-tee you that 90% of millerwelds forums are not liberals, so you catch my drift.

If you go legit the equipment and truck you've already purchased will be business assets. As such they follow a depreciation schedule. This depreciation comes off the top line along with a whole bunch of other expenses thereby reducing your taxable bottom line. In essence Uncle Sam will pay for your equipment.

On the other hand if you do it your way you will be double taxed. And besides not being legit you will be guilty of tax evasion. So, I would call an accountant who handles businesses and tell him what you want to do. He/she may very well be willing to chat with you for free so you started on the right foot in the hopes of getting your business later.
Good luck!

PS: Death and taxes transcend conservatism and liberalism alike.

[stickermigtigger]

Charge just enough to give them a heart attack and not quite enough to kill them.

Love it. Pretty much the definition of Capitalism. :-)

[Hardrock40]

If you go legit the equipment and truck you've already purchased will be business assets. As such they follow a depreciation schedule. This depreciation comes off the top line along with a whole bunch of other expenses thereby reducing your taxable bottom line. In essence Uncle Sam will pay for your equipment.

On the other hand if you do it your way you will be double taxed. And besides not being legit you will be guilty of tax evasion. So, I would call an accountant who handles businesses and tell him what you want to do. He/she may very well be willing to chat with you for free so you started on the right foot in the hopes of getting your business later.
Good luck!

PS: Death and taxes transcend conservatism and liberalism alike.

Here is what happens when you try to start up a legit business.

You buy equipment, more equipment, advertise and more etc.

You file your taxes, assets / cost are deprecated but over a few or more years while also buying more equipment. You show a lose because you didn't make more money than you spent, so the deprecation amount is more than you made.

Three years of this shows your not a legit business but more of a hobbyist. Tax man says close the business, but keep trying and if you make money you have to reopen the business and pay tax.

What the he##, what if I make less than the deprecation of the assets plus the stuff I'm still buying? I can't keep showing a lose but I must pay tax because I made money???

The way I look at it, is keep everything,, receipts. Make money but until you can make enough to pay tax on which is over what your cost deprecation are, you can't call it a business. TAX man don't call it a legit business until you can pay tax on it.

[JTMcC]

In essence Uncle Sam will pay for your equipment.

No, Uncle Sam allows you to pay for your equipment with pre tax dollars. Big difference there.

J

[Arizona Joe]

No, Uncle Sam allows you to pay for your equipment with pre tax dollars. Big difference there.

J

Yes, of course.

[jpence38]

Here is what happens when you try to start up a legit business.

You buy equipment, more equipment, advertise and more etc.

You file your taxes, assets / cost are deprecated but over a few or more years while also buying more equipment. You show a lose because you didn't make more money than you spent, so the deprecation amount is more than you made.

Three years of this shows your not a legit business but more of a hobbyist. Tax man says close the business, but keep trying and if you make money you have to reopen the business and pay tax.

What the he##, what if I make less than the deprecation of the assets plus the stuff I'm still buying? I can't keep showing a lose but I must pay tax because I made money???

The way I look at it, is keep everything,, receipts. Make money but until you can make enough to pay tax on which is over what your cost deprecation are, you can't call it a business. TAX man don't call it a legit business until you can pay tax on it.

Have you ever run a business??
Have you ever filed your own taxes on a business if you ran one??
By your comments I don't think you have on either question therefore how can you give advice???
Not trying to be an [email protected]$, but what you said made no sense.

[JTMcC]

Yes, of course.

Well it's a shame, because if the govt bought my equipment I'd have a monster truck, a helicopter and a main battle tank parked in the front yard, all with a welding machine tucked in somewhere of course : )

J

[MMW]

Well it's a shame, because if the govt bought my equipment I'd have a monster truck, a helicopter and a main battle tank parked in the front yard, all with a welding machine tucked in somewhere of course : )

J

The government will not buy your equipment if you are a hard working business owner. However it is free if you are one of the following.

Don't like to work or work hard at doing nothing, are not here legally, can have a baby every 9-10 months, have a really stupid idea to qualify for the study of something, etc.

[jpence38]

The government will not buy your equipment if you are a hard working business owner. However it is free if you are one of the following.

Don't like to work or work hard at doing nothing, are not here legally, can have a baby every 9-10 months, have a really stupid idea to qualify for the study of something, etc.

I will have to second that.

[Precision]

What Should I charge people?

^^ they will give you a free cell phone too. :-)

[Broccoli1]

Here is what happens when you try to start up a legit business.

You buy equipment, more equipment, advertise and more etc.

You file your taxes, assets / cost are deprecated but over a few or more years while also buying more equipment. You show a lose because you didn't make more money than you spent, so the deprecation amount is more than you made.

Three years of this shows your not a legit business but more of a hobbyist. Tax man says close the business, but keep trying and if you make money you have to reopen the business and pay tax.

What the he##, what if I make less than the deprecation of the assets plus the stuff I'm still buying? I can't keep showing a lose but I must pay tax because I made money???

The way I look at it, is keep everything,, receipts. Make money but until you can make enough to pay tax on which is over what your cost deprecation are, you can't call it a business. TAX man don't call it a legit business until you can pay tax on it.

Technically you can't do that because the " legit" part pertains to the tax credits they give you. So... If you make money, actually Charge , they don't really care if you make money- you are taxed on that transaction. Not immediately like a sales tax you see at a store but it is there floating in the ether of accounting to come due at tax time.
In very basic lingo ... At the end of the year you add up all yer money and then figger out what you owe on that income. You get to deduct all of your business expenses towards that dollar amount which reduces your total income which reduces what you then owe the gubment .
They give you a 5 year window for start up because there are more expenses during start up which can affect your income in to the red. This gives you a zero tax payment.
Hobby Loss Rule of Thumb. If a business reports a net profit in at least 3 out of 5 years, it is presumed to be a for-profit business. If a business reports a net loss in more than 2 out of 5 years, it is presumed to be a not-for-profit hobby.
They give you options on how you wish to offset big ticket items but after 5 years if you keep showing a loss then they'll climb up your arse and ask WTF? You can't keep buying equipment and supplies forever and not make any money.

[Broccoli1]

Another thing about the Hobby thing is that if the IRS decides that it is in fact a hobby you the owe them all of the tax money you didn't pay for those 3 years because you were calling it a business.

😁

[Arizona Joe]

Well it's a shame, because if the govt bought my equipment I'd have a monster truck, a helicopter and a main battle tank parked in the front yard, all with a welding machine tucked in somewhere of course : )

J

What I wrote was,

"This depreciation comes off the top line along with a whole bunch of other expenses thereby reducing your taxable bottom line. In essence Uncle Sam will pay for your equipment. "

I thought it was clear that the money came from savings in taxes... unless you take the sentence out of context.

[Broccoli1]

What I wrote was,

"This depreciation comes off the top line along with a whole bunch of other expenses thereby reducing your taxable bottom line. In essence Uncle Sam will pay for your equipment. "

I thought it was clear that the money came from savings in taxes... unless you take the sentence out of context.

It was clear- jt was funnin' with the tank stuff