topic Re: In addition to @How do I maximize the deductions for my side gigs?" in Business & farm

In addition to @How do I maximize the deductions for my side gigs?"

MOP2018 — Wed, 22 May 2024 21:57:07 GMT

I was reading the response to maximizing the deductions for side gigs. I own an LLC. A cleaning company. So, when I meet with a vendor or spend time on my computer for business, this counts as an expense? I pay myself an hourly wage when I clean but often wondered how this works. If yes, what is the best way to track it

Re: In addition to @How do I maximize the deductions for my side gigs?"

Bsch4477 — Thu, 23 May 2024 15:24:35 GMT

Are you a sole proprietor or an S corporation.

Re: In addition to @How do I maximize the deductions for my side gigs?"

MOP2018 — Thu, 23 May 2024 17:53:46 GMT

I am a sole proprietor.

Re: In addition to @How do I maximize the deductions for my side gigs?"

VolvoGirl — Thu, 23 May 2024 18:03:27 GMT

If your Single Member LLC is NOT an S corp. it is a disregarded entity and you file it on Schedule C in your personal 1040 tax return. You do not pay yourself.

Sole proprietors cannot take a withdrawal or salary and include it as an expense on their tax return. As a sole proprietor, you are not an employee of the business. You don't pay yourself or enter a salary or withdrawal for yourself. All the business income and expenses are your personal income and expenses in the first place. You just fill out a Schedule C. The net profit or loss is your income. If you have a net profit of $400 or more on schedule C you will pay SE self employment tax on it in addition to your regular income tax. It's all included on your personal 1040 form.

Here is some IRS reading material……

IRS information on Self Employment

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Pulication 334, Tax Guide for Small Business

http://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses

http://www.irs.gov/pub/irs-pdf/p535.pdf