Taxes

[exhilti]

I've gotten to the point where I have enough locations that I opened an llc and got insurance. Recently. ordered all my tax stickers. My question is what info do you need to keep to mazimize your deductions come tax season. 

 

I opened up a commercial bank account for the business and have been paying for all my products this way. (Do I need to keep all the receipts?) Can I write off mileage and phone? 

 

How do you itemize the cost/depreciation of the machines? I figured I would ask the experts before going to my accountant. 

 

Thanks in advance. 

[CajunCandy]

Get a reliable tax account and he or she can answer all your questions on this subject.

 

cajun

[AZVendor]

Cajun is correct.  Only a licensed tax guy can tell you what's required in your area.  You'll need one at end of year anyway so find one now.  You will need to keep ALL receipts including your mileage records if you're claiming the mileage deduction.  Record what every trip is for, personal or business.  You can expense everything in the proportion it's used for business. 

[KychrisKy]

I keep every little receipt, and every two weeks I record everything in a legar, such as gas, bakery, auto repairs etc

[MylesQM]

To echo the others on this post, consult a tax professional to get definitive answer.  Beyond that, build a relationship with them, just like you would with an other business owner whose goals align with yours.

 

Until you talk with one, here are a few guidelines: because LLCs are pass-through entities, you will need to be super meticulous with your bookkeeping.    I use Quicken Home and Business and separate my personal accounts from my business accounts and scan all my receipts.  KychrisKy goes old school with a physical ledger and keeps every receipt.  Whatever system you use, you will need to use it religiously to provide your tax preparer with the information they need to maximize any tax savings you may be entitled to.

 

Keep in mind that that the state in which you've formed the LLC may or may not require you to remit sales taxes more often.  Again, consult your pro for the requirements of your state.

 

Mileage is definitely deductible.  If you have a purely dedicated phone number that is ONLY used for the business, then that is deductible.  Cell phones are more of a gray area and the increased likelihood of an audit may not be worth the relatively small deduction you may get.

 

Machines that are purchased outright are simply deducted in the year they are purchased.  You will only have to worry about how you'll depreciate the value of machines if you lease them.