by Bernie Weishapl » Tue Feb 28, 2017 7:45 am
Not sure about a LLC but I am a sole proprietorship. I will try and answer your questions. I have H & R Block do my taxes because with depreciation I just want someone who knows what is going on and the tax laws. I would suggest you get someone who knows the tax laws in your state or area to help. I also use QuickBooks which can be deducted for my business to make invoices, collect payments, etc and keep track of my profit and loss. Just make sure you keep good and accurate records in case the State or the IRS comes a calling.
1) Yes you can deduct tools on your taxes. The big expensive tools I use depreciation. As for parts at the end of the year I have what my beginning inventory was at the beginning of the year and my ending inventory which is used for tax purposes. I also deduct part of the gas bill for heat, part of my electric bill, my cellphone which I use for business, any supplies you use to do shop repairs, computers and software you use for business, insurance for the business, sales tax you paid, advertising, mileage for your vehicle used for business, etc. Since this business is at my home I can only deduct part of the electric, gas, etc which is all on one bill for the house. You will have to keep records of mileage if you use your vehicle for business. I use mine for service calls for grandfather clocks. I keep a book in my pickup which I write the date, beginning mileage and ending mileage.
2) I believe you can deduct classes and professional fees such as belonging to NAWCC, etc. Check with a tax expert for sure.
3) Yes I do carry liability insurance. I carry it no matter if I do farmed out work or just work that comes in my shop from customers. I have it in case anything happens such as fire or if something gets broke in my shop. Since I do this work at my house where I have a shop I also have it in case a customer falls or get injured on my property.
4) You will need a sales tax license if you take in customers items for repair. Also you will need it even if you do work farmed to you by jewelry stores or other clock/watch shops most times they will collect the sales tax but you still have to report it on you quarterly sales tax report. If they collect the sales tax you will report that they were tax free on your end. It is something you should check into.
Just some of the things off the top of my head this morning. Hope it helps.
Bernie