annabananana Posted 20 May 2013 , 12:26am
post #1 of

AOkay so I haven't done my taxes because I wanted to do them myself but now I need to get all my paperwork together for an accountant. I have receipts from before I got started, for like plumbing and paint and tile, and reciepts for pans and spatulas and colors and stuff, and receipts for food items. And some for permits and fees. Those are all detuctable at different rates right? Do I separate them? Do I do it by date? Some stuff wasn't bakery stuff too on a certain receipt like it might have all food items from Kroger's and then a hot wheels car, do I Mark it out and put the new total down there at the bottom? And I don't have receipts for about a thousand things I have had for ages but I am using for the business. I was thinking of going to a website like global sugar and putting all the stuff I have in the cart and printing it out to show him. I bought all my fat daddy's pans when I got a rebate check like 5 years ago, over $500 worth but no receipt. And my luster dust was $3-4 each but I had them for years about $200 worth. And I got lots of Williams Sonoma on Craigslist.

If you were the accountant how would you want them organized? I was thinking of making it as easy as possible since he is going to be going through them and he charges by the hour. Does your accountant have you get yours together some way? He just told me to bring them it he will do the rest but I am scared it is gong to cost too much. I only made $10,000 in sales in 10 months but it was my first year.

16 replies
jason_kraft Posted 20 May 2013 , 12:50am
post #2 of

AYou'll probably want to organize your receipts by type of expense (ingredients, supplies, fees, etc.), then by date. If you have receipts with non-business expenses, circle them and write the total of the business expense only on each receipt. Generally you can only deduct expenses paid during the last year.

If you don't have a receipt for a business expense you can't deduct it, but if you bought the item online within the past year you may be able to contact the retailer and have them send you a new copy of the receipt.

For the income side you probably won't need to bring all your signed invoices as long as you have a total income amount, again by type if you offer different classes of products and services. Definitely keep the invoices for your records though.

jason_kraft Posted 20 May 2013 , 12:50am
post #3 of

AYou'll probably want to organize your receipts by type of expense (ingredients, supplies, fees, etc.), then by date. If you have receipts with non-business expenses, circle them and write the total of the business expense only on each receipt. Generally you can only deduct expenses paid during the last year.

If you don't have a receipt for a business expense you can't deduct it, but if you bought the item online within the past year you may be able to contact the retailer and have them send you a new copy of the receipt.

For the income side you probably won't need to bring all your signed invoices as long as you have a total income amount, again by type if you offer different classes of products and services. Definitely keep the invoices for your records though.

liz at sugar Posted 20 May 2013 , 12:54am
post #4 of

I am NOT an accountant, but you may be able to only deduct expenses for the calendar year you are filing for.   I would call and ask before sorting your information.

 

We had a rental once where we were able to "hold over" expenses from a prior year until the unit was ready to rent, but I don't remember anything like that regarding our restaurant business.  Unless your accountant will file multiple year returns for you, which I'm really not sure is possible if you didn't have any sales in previous years.

 

I hope someone will give you some more definitive advice, but that is my best guess.

 

Liz
 

annabananana Posted 20 May 2013 , 1:03am
post #5 of

AOkay so I was going to start in 2011 but it happened in 2012. I bought like $5000 worth of stuff in 2009 and 2010 so I am screwed?

BakerBee7468 Posted 20 May 2013 , 1:38am
post #6 of
Quote:
Originally Posted by annabananana 

Okay so I was going to start in 2011 but it happened in 2012. I bought like $5000 worth of stuff in 2009 and 2010 so I am screwed?


I'm cannot give a definite answer either. you will need to talk to your accountant but i'm going to agree with Liz at sugar and say that you may only be able to deduct items you bought in the yr you used them. so for instance when filling your 2012 taxes you can only deduct expenses for 2012 and only for things you have receipts for. as for anything you bought in prior years, if you weren't in business then i would say you cant deduct those items. talk to your accountant but you can also find information about business expenses on the irs website.

southconft Posted 20 May 2013 , 5:18am
post #7 of

AI was just in school for accounting so maybe I can help and make it understandable... when you buy a say mixer that mixer has so many hr. Of useful life. Each year you write of the number of hr used or deprecation of that year. Not the whole cost. Should be the same with pans and other costly items. It would not matter the year it is bought but used. I know about writing off large equipment and furniture should be the same.

MimiFix Posted 20 May 2013 , 11:01am
post #8 of

I assume the timeliness of filing taxes has already been addressed with your accountant...  It would be helpful for you to see the tax form for your business classification since the categories are listed separately. You would then know how to organize receipts. I fill out the Schedule C every year as a sole proprietor and have separate totals for ingredients, packaging, etc - those categories are all listed on the tax form. Larger equipment must be amortized for depreciation. This is definitely an area you need to discuss with an accountant. Gather whatever receipts you have and show your accountant the dates so they can determine if these purchases can be applied to business expenses. 

southconft Posted 20 May 2013 , 4:12pm
post #9 of

AO I forgot to say... anything that goes out on or in product is part of the product is know as overhead so the dust won't be wrote off I know it seems like its a tool to us but its over head stock... just the same to taxes as flour.

jason_kraft Posted 20 May 2013 , 4:35pm

A

Original message sent by southconft

O I forgot to say... anything that goes out on or in product is part of the product is know as overhead so the dust won't be wrote off I know it seems like its a tool to us but its over head stock... just the same to taxes as flour.

Overhead is usually defined as costs that are not attributable directly to a product, such as insurance, license fees, accounting costs, etc. Anything included in a product you sell would be considered ingredients or supplies, and the deduction would happen when the expense was incurred (e.g. when you bought the container of dust or bag of flour).

MimiFix Posted 20 May 2013 , 6:37pm
Quote:
Originally Posted by jason_kraft 


Overhead is usually defined as costs that are not attributable directly to a product, such as insurance, license fees, accounting costs, etc. Anything included in a product you sell would be considered ingredients or supplies, and the deduction would happen when the expense was incurred (e.g. when you bought the container of dust or bag of flour).

I no longer buy dust. Too expensive and has a gritty mouth-feel.

SugaredSaffron Posted 20 May 2013 , 9:22pm

ARofl

Annabakescakes Posted 20 May 2013 , 9:58pm

AI had a funny thought looking at this... Could the personal tax forms the OP filed be amended to include the product she bought for the business before it got off the ground? $5000 is a lot of money, if it was bought for the business and just sat there until the business was up and running, there should be some way to count it!

shanter Posted 20 May 2013 , 10:37pm

http://www.irs.gov/taxtopics/tc308.html

 

"Generally, to claim a refund, Form 1040X must be filed within 3 years from the due date of your original return or within 2 years from the date you paid the tax, whichever is later."

jason_kraft Posted 20 May 2013 , 11:18pm

A

Original message sent by Annabakescakes

I had a funny thought looking at this... Could the personal tax forms the OP filed be amended to include the product she bought for the business before it got off the ground? $5000 is a lot of money, if it was bought for the business and just sat there until the business was up and running, there should be some way to count it!

In some cases you may be able to deduct qualified startup expenses incurred before the business was started, but I don't think you can reach back to prior years. It can't hurt to bring older receipts to the accountant but I wouldn't count on them being deductible.

Evoir Posted 20 May 2013 , 11:39pm

In the USA, can a business entity buy equipment (and then depreciate the cost over its life) from an individual?,Hence if the OP purchased $5000 of equipement, the BUSINESS entity she owns can purchase these items from her (as an individual) - albeit at second-hand prices - and thus she has a way of claiming some of the cost?

 

It depends whether you are running a business and are paying company tax, or are simply running this all through your personal income tax. Its hard for me to comment as I am in Australia and we have different tax laws for company and personal (income) tax returns.

 

But I thought I'd raise the company tax idea in case its something worth exploring in the USA where you are.

jason_kraft Posted 21 May 2013 , 12:54am

A

Original message sent by Evoir

In the USA, can a business entity buy equipment (and then depreciate the cost over its life) from an individual?,Hence if the OP purchased $5000 of equipement, the BUSINESS entity she owns can purchase these items from her (as an individual) - albeit at second-hand prices - and thus she has a way of claiming some of the cost?

Converting personal assets to business use is one strategy, as you said the depreciation expense would be based on the market value at the time of conversion. For a pass-through business like a sole prop you don't even have to formally sell the assets to the business. For the OP, it might be helpful to bring a list of personal assets (with current FMV) that are being used in the business to the accountant.

More info: http://www.bizfilings.com/toolkit/sbg/office-hr/vehicles-equipment/using-personal-assets-for-business-equipment.aspx

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