Tax Preparation

[ck89102]

I'm worried about the IRS & my tax liabilities. I've started to buy domains this year and have had some success. Annually, I earn about $50K from my day job & my projected PPC income will total around $18K, although I'm reinvesting most of it. Do I need proof of this? In the past, I've only filed with the IRS the 1040 short form and I'm afraid those days are over.

Can you give me any advice on paperwork/or anything else I should be doing? Will I need to hire an accountant?

Any suggestions/advice/opinions are appreciated.

 

[fatter]

I file a schedule C as a sole propieter using my name as business and SSN as tax ID number, I deduct reg fees from parking income as well as isp fees paper etc, and pay taxes on the profit,15 percent social security, fed and state taxes on the profit. your parking company should send you a 1099 with income although some dont, I would go to an accountant first time if I were you that deals in domains especially if you buy/sell any. I allways wing it myself

 

[ck89102]

Thank you. I'll look for that schedule C form.
I'm sure these are accountant questions like can I deduct a certain % of my rent, electricity, cable fees, other Apt. expenses, pay myself a salary & more to try to offset the income profit? Can I deduct capital expenses like my computer costs?

 

[Duckinla]

my projected PPC income will total around $18K, although I'm reinvesting most of it.

Reinvesting it will not clear you of taxes. You won't get to write off the reinvestment all in one year. You need to use a tax accountant. they are not very expensive and worth every penny. You should be able to get an approximate price up front for services, probably around $500 per year. But they should save you at least that unless you are really good at taxes yourself.

With 18K per year income, you should probably set up a corp to more easily justify the expenses you want to write off. You would pay yourself a very small salary from the corp which is what you would base the 15% Self Employment Tax on.

 

[ck89102]

Sound advice. I'll Inc.
Thank you so very much.

 

[Duckinla]

As I said in PM, check out legalzoom.com. Looks like you can incorporate with S corp for less than half of what I paid my accountant.

BTW, Taxes are a lot more fun once you are incorporated. You start finding nice tax deductable ways to spend that $18K, nicer chair, nicer desk, better computer, plan vacations around domainer conferences, etc.