PILOT SPIN
Spin Zone => Spin Zone => Topic started by: EppyGA - White Christian Domestic Terrorist on January 07, 2022, 07:58:57 AM
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cash
and then, cash will be considered verboten
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Not Stan but we need to crack down on these little old ladies and their garage sales. And what about kids lemonade stands? All that unreported untaxed income, the little criminals! This is why our country is going broke.
Do I need to fool with the green font?
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Our Governments on ever level have become weaponized, for profit entities to benefit the bureaucrats and politicians. The new ROYALTY.
However, the Feds have taken it to a new level of abuse. That's why 1/6 is being so demonized by the politicians and MEDIA.
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It’s not new taxation, but it’s just a continued crackdown on the underground economy by tapping into the technology people are using. My wife obtained a “Square” when she sells baked goods at farmers markets, etc., but she hasn’t used it in a couple years.
I don’t have any sympathy for people who think these “side hustles” (I despise that term) are free money and they don’t have to pay taxes if they get less than $600 or something.
But as with everything the government touches, there will be terrible unintended consequences. Garage and estate sales, for example, are not businesses, and virtually everything is sold at a loss. If they use Pay Pal, they are going to have to report this? They’d better retain receipts for what these goods cost, and include a Schedule C on their returns.
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Garage and estate sales, for example, are not businesses, and virtually everything is sold at a loss.
Not only that, but goods sold at these sales were purchased with taxed money, along with sales tax paid at time of purchase. And now someone wants to tax the "income" in selling these already taxed items? What next, sell a used car and pay "income" tax on that car?
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It’s not new taxation, but it’s just a continued crackdown on the underground economy by tapping into the technology people are using. My wife obtained a “Square” when she sells baked goods at farmers markets, etc., but she hasn’t used it in a couple years.
I don’t have any sympathy for people who think these “side hustles” (I despise that term) are free money and they don’t have to pay taxes if they get less than $600 or something.
But as with everything the government touches, there will be terrible unintended consequences. Garage and estate sales, for example, are not businesses, and virtually everything is sold at a loss. If they use Pay Pal, they are going to have to report this? They’d better retain receipts for what these goods cost, and include a Schedule C on their returns.
Not only that, but goods sold at these sales were purchased with taxed money, along with sales tax paid at time of purchase. And now someone wants to tax the "income" in selling these already taxed items? What next, sell a used car and pay "income" tax on that car?
Wouldn’t sales of items you bought be capital gains, not income? Hence why you keep receipts for when you bought them?
And if you sell your own baked goods, that’s income but shouldn’t you deduct the cost of the ingredients and a portion of your kitchen and utilities as a small business? Suppose you net in the negative? Then you write off as a loss and can’t qualify as a business if you do so three years in a row, right? So the fourth year, do you have to report the sale as income? Even though your “business” is defunct and you still spent more making them?
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Then you write off as a loss and can’t qualify as a business if you do so three years in a row, right? So the fourth year, do you have to report the sale as income? Even though your “business” is defunct and you still spent more making them?
This is a myth.
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Wouldn’t sales of items you bought be capital gains, not income? Hence why you keep receipts for when you bought them?
And if you sell your own baked goods, that’s income but shouldn’t you deduct the cost of the ingredients and a portion of your kitchen and utilities as a small business? Suppose you net in the negative? Then you write off as a loss and can’t qualify as a business if you do so three years in a row, right? So the fourth year, do you have to report the sale as income? Even though your “business” is defunct and you still spent more making them?
Yes, but because you can’t take a loss on the sale of a personal asset, people just historically don’t report such sales. If you actually made a profit, such as if you sold a vintage auto, you would need to report it on Schedule D as a capital gain.
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This is a myth.
It’s not really a myth, but it is a safe harbor.
There is a confluence between hobby losses and a business.
If you have a hobby, you have to pick up income on page 1, and hobby expenses as an itemized deduction. The problem is with Trump’s Tax Cut and Jobs Act, miscellaneous itemized deductions are no linnet deductible.
So, III will want to establish a profit motive for your business so it is t treated like a hobby.
If you have a business, facts and circumstances dictate whether or not you have a profit motive. It’s pretty subjective, and the taxpayer has the burden of proof. So make a business plan, and treat your business as a business, not a hobby.
If you meet the safe harbor, the presumption is that you have a profit motive.
The safe harbor is met if you have a net profit in 3 out of 5 years (2 out of 7 if the activities involve horse racing, breeding, or showing.) the. The burden of proving you don’t have a profit motive shifts to the IRS.
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It’s not really a myth, but it is a safe harbor.
There is a confluence between hobby losses and a business.
If you have a hobby, you have to pick up income on page 1, and hobby expenses as an itemized deduction. The problem is with Trump’s Tax Cut and Jobs Act, miscellaneous itemized deductions are no linnet deductible.
So, III will want to establish a profit motive for your business so it is t treated like a hobby.
If you have a business, facts and circumstances dictate whether or not you have a profit motive. It’s pretty subjective, and the taxpayer has the burden of proof. So make a business plan, and treat your business as a business, not a hobby.
If you meet the safe harbor, the presumption is that you have a profit motive.
The safe harbor is met if you have a net profit in 3 out of 5 years (2 out of 7 if the activities involve horse racing, breeding, or showing.) the. The burden of proving you don’t have a profit motive shifts to the IRS.
This is why we hire an accountant to do our taxes. I can barely follow that.
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This is why we hire an accountant to do our taxes. I can barely follow that.
I’ve been a tax CPA for 38 years. If not for being a pilot, I’d really be a hit at cocktail parties. Lol
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I’ve been a tax CPA for 38 years. If not for being a pilot, I’d really be a hit at cocktail parties. Lol
The one we’ve been using for 15 years we met at the gun range and is a friend, he works for a large firm, called me up and said they are raising their fee 40% this year. He said there is a huge shortage of accountants and they have way more work than they can handle and they are trying to shed clients. He was getting ready to take a long medical leave and said the firm can keep us but he recommended we switch to his old mentor, a small family owned firm somewhere out west who said he would take just two of his clients specially picked, at a cheaper fee. I was gobsmacked, there is such a shortage that accountants are now discriminating and only taking on “good” clients? He said “good” meant we are well organized, nice, pay our bill, and once in a while ask an interesting question.
Anyway he said if we really wanted to stay with him he would waive the 40% increase but his bosses would be pissed about it and he is going to retire in a year or two anyway, then we’d be stuck with the higher fee and might have lost our chance to get in with the guy out west. So we are switching this year, I just got the new guy’s organizer.
Is it really that bad? He was saying old CPAs are retiring right and left and the young people “don’t like to work. They just aren’t taking up the slack,” as he put it.
To make things worse, the retiring guys used to work independently on their own after officially retiring, and he had planned to, but now with everything done through portals and technology, the security and equipment you’d have to buy make it cost prohibitive. Back in the old day you’d do it on paper, you didn’t have that expense, so the pool of post retirement part time accountants is also shrinking.
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The one we’ve been using for 15 years we met at the gun range and is a friend, he works for a large firm, called me up and said they are raising their fee 40% this year. He said there is a huge shortage of accountants and they have way more work than they can handle and they are trying to shed clients. He was getting ready to take a long medical leave and said the firm can keep us but he recommended we switch to his old mentor, a small family owned firm somewhere out west who said he would take just two of his clients specially picked, at a cheaper fee. I was gobsmacked, there is such a shortage that accountants are now discriminating and only taking on “good” clients? He said “good” meant we are well organized, nice, pay our bill, and once in a while ask an interesting question.
Anyway he said if we really wanted to stay with him he would waive the 40% increase but his bosses would be pissed about it and he is going to retire in a year or two anyway, then we’d be stuck with the higher fee and might have lost our chance to get in with the guy out west. So we are switching this year, I just got the new guy’s organizer.
Is it really that bad? He was saying old CPAs are retiring right and left and the young people “don’t like to work. They just aren’t taking up the slack,” as he put it.
To make things worse, the retiring guys used to work independently on their own after officially retiring, and he had planned to, but now with everything done through portals and technology, the security and equipment you’d have to buy make it cost prohibitive. Back in the old day you’d do it on paper, you didn’t have that expense, so the pool of post retirement part time accountants is also shrinking.
That is all true. First, you need 150 credit hours to take the CPA exam. That means you basically get a Masters before taking the exam. That’s one problem.
Work ethic is another problem. It’s generational. I can’t believe the seminars and meetings we’ve had on how to work with the current generation. I shit you not. I’m pretty sure if you told the managing partner of a firm I was in after college that he needed to learn how to motivate me, he would have thrown an ashtray or a calculator across the room.
The current generation fucking LOVES working from home. Covid was PERFECT for them. The problem is these young people aren’t mentoring their new associates, aren’t visiting clients, and aren’t fully developing themselves. They are hampered by themselves.
We aren’t making it attractive for people to be CPAs for the long term. In the old days, we were motivated to get to the point where you can leave early, golf during the day, and basically be the big shot. NOW, partners are working the longest hours, sending emails late at night or on Sundays, are NEVER detached from their computer or phone, and usually aren’t really living life. Yet we think people want to follow in our footsteps? We are idiots.
Many retired CPAs just consult, and don’t hang out the shingle to do taxes. The IRS requires any firm preparing more than x number of returns have to use electronic filing. That involves some level of technology infrastructure. For me, the LAST thing I would want to do is taxes when I retire.
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It’s not really a myth, but it is a safe harbor.
There is a confluence between hobby losses and a business.
If you have a hobby, you have to pick up income on page 1, and hobby expenses as an itemized deduction. The problem is with Trump’s Tax Cut and Jobs Act, miscellaneous itemized deductions are no linnet deductible.
So, III will want to establish a profit motive for your business so it is t treated like a hobby.
If you have a business, facts and circumstances dictate whether or not you have a profit motive. It’s pretty subjective, and the taxpayer has the burden of proof. So make a business plan, and treat your business as a business, not a hobby.
If you meet the safe harbor, the presumption is that you have a profit motive.
The safe harbor is met if you have a net profit in 3 out of 5 years (2 out of 7 if the activities involve horse racing, breeding, or showing.)
the. The burden of proving you don’t have a profit motive shifts to the IRS.
I always thought the "safe harbor" was just scuttlebutt and not actual code.
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That is all true. First, you need 150 credit hours to take the CPA exam. That means you basically get a Masters before taking the exam. That’s one problem.
Work ethic is another problem. It’s generational. I can’t believe the seminars and meetings we’ve had on how to work with the current generation. I shit you not. I’m pretty sure if you told the managing partner of a firm I was in after college that he needed to learn how to motivate me, he would have thrown an ashtray or a calculator across the room.
The current generation fucking LOVES working from home. Covid was PERFECT for them. The problem is these young people aren’t mentoring their new associates, aren’t visiting clients, and aren’t fully developing themselves. They are hampered by themselves.
We aren’t making it attractive for people to be CPAs for the long term. In the old days, we were motivated to get to the point where you can leave early, golf during the day, and basically be the big shot. NOW, partners are working the longest hours, sending emails late at night or on Sundays, are NEVER detached from their computer or phone, and usually aren’t really living life. Yet we think people want to follow in our footsteps? We are idiots.
Many retired CPAs just consult, and don’t hang out the shingle to do taxes. The IRS requires any firm preparing more than x number of returns have to use electronic filing. That involves some level of technology infrastructure. For me, the LAST thing I would want to do is taxes when I retire.
Wow. I’m seeing something similar in the young generation I work with, doing auditing.
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I always thought the "safe harbor" was just scuttlebutt and not actual code.
Nope! Congress actually did something.
Sec. 183(d)
https://www.law.cornell.edu/uscode/text/26/183
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if you told the managing partner of a firm I was in after college
Curious - which firm?