Posted by Melody on 3/27/05 6:29pm
Msg #27944

Our basic expenses are high

I just finished my taxes. Below are some of my expenses.

$2,050 for gas
This represents 41 jobs that pay $50 each

$1,175 for cell & fax phones
23 jobs that pay $50

$540 for cable internet connection
10 jobs that pay $50

$712 for office supplies
14 jobs that pay $50

It would take 88 Signing Service jobs that pay $50 each just to pay for the above expenses.

I had MANY more deductible expenses than just the above.

Plus I will have to replace my car much sooner than if I had an office job.

This is part of why I will not accept any job paying less than $100.

Reply by CA on 3/27/05 7:01pm
Msg #27946

You should include this information with your charges. BTW, only enhances the deceptiveness of the notary/signing class operations.

Reply by Melody on 3/27/05 8:13pm
Msg #27949

Dear CA,

"You should include this information with your charges."
I don't know what you mean by your this. Would you like me to say something more? Is there something I should have said more clearly?


"only enhances the deceptiveness of the notary/signing class operations."
I agree!

Reply by CaliNotary on 3/27/05 10:26pm
Msg #27957

Actually, compared to most businesses our basic expenses are pretty minimal. We don't have to pay for office space, we don't have to pay employees. And pretty much every business has phone, internet and office supply expenses.

Reply by Mike/NJ on 3/27/05 10:50pm
Msg #27960

......Actually, compared to most businesses our basic expenses are pretty minimal. We don't have to pay for office space, we don't have to pay employees. And pretty much every business has phone, internet and office supply expenses......

It depends.. I do pay for space and have sub contractors. You have to keep in mind, if you bring your car to the dealer it may cost $100/hour for labor but the person who works on the car does not get that.

On the books I have not made a dime running the business so far. My wife and I have this debate all the time.

rule of thumb 70% of your monthly income should cover all the expenses.

Reply by Stephanie/CA on 3/28/05 11:39am
Msg #28006

Re: Our basic expenses are high....Mike/NJ

Mike

It seems obvious to me that if you have sub contractors, your expenses will be higher.
Regarding the $100/hour labor on automobile repairs...wether I am operating a small business or not, my car will require regular maintenance/repairs.

As Cali indicated all businesses have telephone and internet charges plus office supplies.
Mike,
I don't think you can compare your situation with others since you indicated that you and your wife are a Signing Service within the state of New Jersey, rather than an independent contractor, as most of us are.
***I would expect that your expenses would be higher.

Reply by Donna Sac on 3/27/05 11:25pm
Msg #27962

Good job on the expenses! Good way to beat the IRS

Reply by CarolynCO on 3/28/05 8:07am
Msg #27977

All the expenses you mention, gasoline, cell/fax, internet and office supplies are tax deductible write-offs. Any self-employed individual is responsible for similar expenses, regardless of what type of business you operate. You didn't mention anything about quarterly self-employment taxes, but I hope you are paying same throughout the year -- if not, you could find yourself owing penalties.

Reply by Art_MD on 3/28/05 8:11am
Msg #27978

As for gasoline expenses.

$2050 for gas. at $2.05/gal thats 1,000 gallons.
at 20/MPG thats 20,000 miles.
at $ .415/miles deductable, thats $8300 in expenses which are deductable.

Art

Reply by Mike/NJ on 3/28/05 8:13am
Msg #27980

there is away around that.. If you have not drawn a salary you don't pay taxes. But if you loaned the company money for start up or a bad month (cover bills) you can pay yourself back without taxes.

Reply by CarolynCO on 3/28/05 8:57am
Msg #27982

Unfortrunately, there's a lot more that comes into the picture, and the tax issue is not as simple as you say. A tax attorney, accountant or CPA should always be consulted to discuss all the options and consequences.

Reply by Mike/NJ on 3/28/05 9:23am
Msg #27984

I agree with you Carolyn and people should consult an accountant and not everyone's situtation is the same. I don't suggest taking financial advice from a message board, I just pointed out what I do to bypass salary tax. It works for my company. Loan repayments are not subjected to tax.

I am in the financial field and have a background in tax laws.

Reply by Cheryl_NV on 3/28/05 9:24am
Msg #27985

This won't work if you are a sole proprietor. I am an accountant

Reply by Mike/NJ on 3/28/05 9:25am
Msg #27986

setup as a Corp..

Reply by CarolynCO on 3/28/05 2:38pm
Msg #28048

Thanks Cheryl. That's exactly the point I was trying to get across, and I would assume there are more signing agents acting as sole proprietors then there are operating as corporations.

Reply by CarolynCO on 3/28/05 2:35pm
Msg #28047

That's what I was trying to get at -- everyone's biz situation is different, i.e., sole proprietor, incorporated as a PC, PLC, LLC, etc. -- all tax situations are different. Too many people take what they read on these boards as gospel, and I didn't want someone to conclude that they could pay themself a salary and avoid taxes.