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| Karaoke and The Tax Man https://mail.karaokescene.net/forums/viewtopic.php?f=1&t=3058 |
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| Author: | jr2423 [ Sun Oct 31, 2004 11:22 am ] |
| Post subject: | Karaoke and The Tax Man |
OK, for you KJ's out there, how about taxes? My understanding is that, on start-up, I can claim a loss for five years. After which I must turn a profit or not claim the business anymore. (And essentially become an expensive hobby) What if I lose six years and turn a profit the seventh? Is it only that I can't claim any more losses on that sixth year? Do I not exist as a business for that sixth year? Do I report the seventh year under the same business name? If I should experience a loss next year (the fifth), Should I change my business name and start as a new entity? (another five years?) I'm coming up on my fourth year since I started claiming the business for tax purposes. The first two years we're red due to initial start-up costs. Last year looked like I would break even until I decided to relocate from NH to AZ. This year has been like starting-up all over again. Though My losses won't be as much as the first two years, they'll still be losses. I guess many of you would think of me as an expensive hobbyist based on my losses. All I can say is that I've turned every dollar earned back into more music and equipment; as well as money out-of-pocket. (hence the loss) I'm not complaining about the losses. I'm just trying to obtain some foresight into the next tax year to determine what I need to do should the situation continue. |
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| Author: | Tony [ Sun Oct 31, 2004 12:57 pm ] |
| Post subject: | |
Don't expect a valid legal answer from anyone unless he or she is a IRS qualified rep or a qualified CPA! You might get 1000's of answers, but will have no validity in the eyes of the IRS. Whatever you do, talk to your CPA (that is also tax deductable) I can tell you what happened to me or how I did my taxes, but that will/might not be valid for you. The best is to research your case at http://www.irs.gov/ or what I did, buy the latest of the following 2 books Doing Business tax-free by Robert A. Cooke and 422 Tax Deductions for business and self emplyed individuals by Bernard B. Kamaroff These books are extremely helpful and no business owner should be without them! |
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| Author: | marty3 [ Sun Oct 31, 2004 11:18 pm ] |
| Post subject: | |
I agree - Look for a tax accountant for these issues... |
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| Author: | jr2423 [ Mon Nov 01, 2004 1:58 pm ] |
| Post subject: | |
I'm not looking for tax advice. I'm just qerying the general KJ/DJ populous with respect to thier personal experience. So taht I, and maybe some others may learn. After all, experience is the best teacher. This was also meant to be thought provoking, and stimulate conversation. So, let's converse. |
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| Author: | karaokemeister [ Mon Nov 01, 2004 2:47 pm ] |
| Post subject: | |
I think you're referring to the rule regarding business expenses. Check IRS publication 535 for more information and seek information from a tax professional. The below link is to the IRS publication mentioned above and in no way competes with any sponsor of this site. Please leave it as a reference. http://www.irs.gov/publications/p535/ch01.html |
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