The Tax Preparation Blog

Posts Tagged ‘tax service flyers’

Question: Do I have to claim my services on my taxes?

Suppose I started my own little county-wide computer repair business and I go to the customer’s home to install wireless networks, repair computers, etc. Would I need to claim these services and the money made from them on my taxes? It’s not really even a business. I don’t own a building or anything. I made my own little flyers and business cards and I just use my own computer experience and knowledge as a self-aid. I recently considered putting the paypal option on my website to give customers the option to pay with credit instead of cash/check. Let me know. I don’t see it any different than running my own little lawn cutting business as a child or even babysitting. Someone please shine some light on my situation.

Answer: Income is income. You probably didn’t declare the income from babysitting or lawn cutting because it wasn’t enough to require filing. The IRS is also a little shy about the publicity auditing a 12-year old kid would generate.

Not only is the income taxable, but since you are now self employed you have to pay income tax and self-employment tax of about 15%.

Now for some good news. You have flyers, business cards, a web site, etc. You are a business. If you don’t make money this year, at least you have demonstrated that your intention is to make money. Under the “hobby-loss” rules, you are presumed to be in business only if you make a profit in three out of five years. If you lose money too often, the IRS will disallow the losses unless you demonstrate that there is a profit motive and that you are taking steps to run the business properly.

Keep good records of everything you spend on your business. That includes records on the miles you drive to each home. Also record your odometer at the beginning and end of the year so that you can keep track of your business portion of your car expenses. If you start making a significant amount of money, you may need to pay estimated taxes on a quarterly basis. This is a good time for you to meet with a CPA for tax and general business advice.

I hope this helps.
Gary

I hope this helps.
Gary

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Question: Teen home computer repair/servicing business?

Im 14 and I am very experienced with computers. Every time a friend needs me to go to his house and work on their computer, I think to myself, I could be making money with this. I would never charge my friends, but I think I could put my skills to good use. I live in a nice golf course neighborhood with around 300 houses in it. Most of the people there are older people who are retired. I was wondering what all I would have to do to start up an at home business for computer repair. I can basically fix anything as long as I dont have to solder anything. Where could I get some sort of certification? How would taxes work for me? Any ideas on advertising? I was thinking putting flyers in peoples mailboxes, thats how most people in my community advertise their business.
I have a fairly large basement and an unused garage slot, so storage and space isnt really an issue.
Thanks

Answer: DO not put them in peoples mail boxes because of federal law. You can do the doors though and up at the store and also signs in the yards.

Go for it man no one likes working for the man so the sooner you make your money the better off youll be.

Only take cash… nothing is traceable. Or contact your local Tax Services if your feeling brave. I would go cash only for two years at least.

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