Accounting when selling a small product line

[CITIZEN F16]

Do take Carbidebobs advice and at least hire an accountant. I used to use turbotax and do my own taxes too but when I got into being a landlord the depreciation part was enough for me to hire an accountant.

It was well worth the money. Now anytime I have a tax related question my accountant is more than happy to take my calls for free as long as they don't get too long winded. I've never paid for advice yet in the last 25 or 30 years beyond paying for my tax accounting.

And if you have a good accountant they may save you as much in taxes as they cost you for their services.

Not everyone is as helpless as you are, a 10 year old should be able to fill out a schedule C for a business that grosses $10k a year. Once again you are useless giving advice on anything. Go start your own thread again and stay away from everything else.

 

[CITIZEN F16]

Why not just call the IRS?
They're very helpful.

I forgot what it was as it was a long time ago, but I had an odd business expense and could not decide what line to use on schedule C, even after reading all the instructions. I called the I.R.S. 3 times and got 3 different answers.

 

[gustafson]

At this level there is no reason to hire an accountant.

Just don't focus on paying no tax instead of figuring out legitimate business expenses

It is like, don't write off all your mileage just some percentage that makes sense
If you are working out of the house, write of a part of your internet, not all of it

There is a ton of stuff they no longer care about so much as they used to.

If this is your first year on the books, probably depreciate your equipment as you are probably going to make more money in the future and will need the writeoff more

 

[michiganbuck]

a schedule C is very easy but as said state sales tax can be a bugger.
I once knew a fellow who was a welder at a shop and sold vitamins on the side. The state of Michigan
discovered his sideline and figured that over some years selling, now owes $250,000 in sales tax.
He packed up bag and baggage and moved to Ohio. I don't know what happened after he left the state.

I gather/think that if you don't collect due sales tax you may owe it out of your pocket.

 

[Radar987]

I forgot what it was as it was a long time ago, but I had an odd business expense and could not decide what line to use on schedule C, even after reading all the instructions. I called the I.R.S. 3 times and got 3 different answers.

I'm both amused and not surprised by that.

People think the IRS consists of a bunch of black suits who know the tax code inside out and are ready to pounce on you at any time. In reality, they're just normal people, many of whom are probably working from home right now, wearing PJs all day, and have toddlers screaming in the background and spilling shit all over the living room carpet. They're prone to making mistakes just like anyone else.

The idea of spending thousands of dollars to cover one's ass when they're only making $10,000 is preposterous. I can't believe some of the advice being given in this thread.

The IRS simply doesn't give a shit about a guy who only makes $10,000 a year. That's the daily rounding error for a real business. Even a junior IRS auditor at the lowest possible government paygrade doesn't have time to chase a guy to collect a few hundred bucks.

 

[cosmos_275]

Check out the book "Small Time Operator"

Amazon.com: Small Time Operator: How to Start Your Own Business, Keep Your Books, Pay Your Taxes, and Stay Out of Trouble: 9781493040209: Kamoroff C.P.A., Bernard B.: Books

Covers the basics in good detail. Get into depreciation as well.

 

[CITIZEN F16]

Check out the book "Small Time Operator"

Amazon.com: Small Time Operator: How to Start Your Own Business, Keep Your Books, Pay Your Taxes, and Stay Out of Trouble: 9781493040209: Kamoroff C.P.A., Bernard B.: Books

Covers the basics in good detail. Get into depreciation as well.

J.K. Lasser books on taxes are also good, well worth the $20 or so for someone squeamish about doing taxes.