Jarola Posted August 9, 2009 Share Posted August 9, 2009 Do purchasing assets play any roll with taxes? If I purchase used machines off craigslist what kind of paper work would I need? Thank you, Jacob Link to comment Share on other sites More sharing options...
alyssamma Posted August 9, 2009 Share Posted August 9, 2009 You don't need any "paperwork" per se, but you need to track your income and expenses. The assets would be expenses. Technically you need to depreciate equipment. However, it will be fine for you not to - you can treat it all as an expense. You pay taxes on income - expenses. Actually, it is slightly more complicated - not all expenses "count" (e.g., meals, entertainment, etc.). However, all of your basic vending expenses will count. Kevin Link to comment Share on other sites More sharing options...
Jarola Posted August 9, 2009 Author Share Posted August 9, 2009 Kevin, so what your saying is my assets can be claimed as an expense when they depreciate? and I thought you could claim lunches if they were business meetings (e.g. If I stop by "XYZ Teriyaki restrunt" and order their #5 and sell them on why my machine would be great in that corner) that I could expense that meal. Jacob Link to comment Share on other sites More sharing options...
alyssamma Posted August 9, 2009 Share Posted August 9, 2009 Jacob, to get an accurate answer to your Q, I would need to know what your profit was for the end of the year + the cost of the equipment. Technically you are supposed to depreciate equipment. However, there is something called Section 179 that allows you to expense equipment (in the year you put it into service only) instead of depreciating it. To do this you need to show a profit. So, you can't have a $1K income and use Section 179 to expense $2K in equipment - that would provide a loss. In that case you would need to depreciate the equipment. Also, for Section 179 you need to fill out a form 4562. Now, all of that being said, I assume you are talking about a hundreds of dollars and not thousands. in that case I would simply expense them and not worry about anything else. True, technically not "correct", but small enough that no one will care. Again, unless you show a loss then none of this matters. If you will show a loss, and are purchasing more than say...$500 worth of equipment, then you need to depreciate (to be "legal"). As for the meals...meals and entertainment expenses are not 100% deductable. Simply get TaxCut or TurboTax and it will walk you through it. There are also some special rules around other expenses...but again, that software will walk you through it all. Kevin Link to comment Share on other sites More sharing options...
alyssamma Posted August 9, 2009 Share Posted August 9, 2009 Oh yeah, one more thing, if you have a vending business and show alot of expenses for non-vending related things (e.g., meals) you might throw up some red flags. Not saying to *not* expense meals, just saying you should be careful Kevin Link to comment Share on other sites More sharing options...
Jarola Posted August 10, 2009 Author Share Posted August 10, 2009 Thank you, Kevin I will be using turbotax. Just trying to get a idea of the kind of records I need to start keeping. Jacob Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now