Taxes Question

[quote]countingbeans wrote:

[quote]xXSeraphimXx wrote:
Do not mean to hijack but, did not want to start a new thread. How would you go about depositing or paying taxes (if necessary) on saved birthday, christmas, etc. cash gifts, that added up over the years.[/quote]

Taxes on gifts are paid by the giver, and I assume unless you have rich ass rich people giving you those gifts they are under both the yearly and lifetime limits for tax purposes.

Well they likely don’t report the income. You only have to file if you make more than $600 in revenue as self employed.

However, I’m a cpa right, so my W2 wages are for being an accountant, if I went out and made $500 on my own, I’d technically have to report it because it is what I do.
[/quote]

Wanted to wait until after the weekend to make sure it did not get lost. This is what I meant about invoices. Online commissions are easy because pay-pal provides invoices to receive payment but, on the weekends I have done charcoal sketches (portraits) and sold them, only cash. I will be going over $600 in the next few weeks sooner if I throw in a couple weekdays. What should be done about those sales?

[quote]twojarslave wrote:

[quote]countingbeans wrote:

[quote]twojarslave wrote:

You may also want to consider hiring an accountant. [/quote]

This, lol.

But otherwise a decent enough post to cover the basics given the questions asked.

[/quote]

Yes, I think that point is worth re-emphasizing, especially if you are looking to grow your business and keep everything above-board.

My tax returns when I did consulting (ERP software implementation with lots of travel) were hundreds of pages thick. I hired a real accountant who charged nearly a grand just to do my state and federal returns.

He was worth every penny. Doing it on my own would have been a nightmare.
[/quote]

What kind of ERP systems do you work with? Are you a software developer/programmer?

One of my friend’s brother makes BANK working with SAP. I’d like to start learning this stuff (primary because I want to make a lot more money and I feel like I’m going to hit the income ceiling soon) but don’t know where to start.

Sorry for the off-topic reply.

[quote]maverick88 wrote:

[quote]countingbeans wrote:

[quote]xXSeraphimXx wrote:
Do not mean to hijack but, did not want to start a new thread. How would you go about depositing or paying taxes (if necessary) on saved birthday, christmas, etc. cash gifts, that added up over the years.[/quote]

Taxes on gifts are paid by the giver, and I assume unless you have rich ass rich people giving you those gifts they are under both the yearly and lifetime limits for tax purposes.

Well they likely don’t report the income. You only have to file if you make more than $600 in revenue as self employed.

However, I’m a cpa right, so my W2 wages are for being an accountant, if I went out and made $500 on my own, I’d technically have to report it because it is what I do.
[/quote]

Wanted to wait until after the weekend to make sure it did not get lost. This is what I meant about invoices. Online commissions are easy because pay-pal provides invoices to receive payment but, on the weekends I have done charcoal sketches (portraits) and sold them, only cash. I will be going over $600 in the next few weeks sooner if I throw in a couple weekdays. What should be done about those sales?[/quote]

The deposits in your bank account will suffice as records of income for the transactions you don’t keep an invoice for.

The thing is, you’ll likely not be proving you actually made the income you’re declaring. As in, if you put down that you made $1300 in street art, and the IRS audits you, they aren’t likely going to want proof you made that $1300, they are going to want ot make sure you didn’t make $2600 and only put $1300 down. You know what I mean?

Just start using invoices. (Set some up, and make 100 photos beforehand, and just write in dates, etc as you sell them).

Big picture this is unlikely to be a big deal…

[quote]En Sabah Nur wrote:

[quote]twojarslave wrote:

[quote]countingbeans wrote:

[quote]twojarslave wrote:

You may also want to consider hiring an accountant. [/quote]

This, lol.

But otherwise a decent enough post to cover the basics given the questions asked.

[/quote]

Yes, I think that point is worth re-emphasizing, especially if you are looking to grow your business and keep everything above-board.

My tax returns when I did consulting (ERP software implementation with lots of travel) were hundreds of pages thick. I hired a real accountant who charged nearly a grand just to do my state and federal returns.

He was worth every penny. Doing it on my own would have been a nightmare.
[/quote]

What kind of ERP systems do you work with? Are you a software developer/programmer?

One of my friend’s brother makes BANK working with SAP. I’d like to start learning this stuff (primary because I want to make a lot more money and I feel like I’m going to hit the income ceiling soon) but don’t know where to start.

Sorry for the off-topic reply.[/quote]

I worked with SAP when I was consulting. I’ve since taken a salary position working with JD Edwards software. I am a business analyst, which is a more functional and business-oriented role in ERP systems implementation/maintenance.

This is pretty vague, but gives a good description of the role.

There’s a lot of ways to break into this line of work, but much of it depends on your background and your goals. The money is pretty good, with senior-level BA jobs topping out well over $100k. You can make much, much more as an independent consultant, but extensive travel, long hours and high pressure can accompany that rate of pay.

I may go back to consulting when I’m in my 40’s (I’m 34 now). For now I like my 5 minute commute, manageable hours and zero travel requirement. I make enough money, time is what I need more of now.

I broke into this line of work by getting recruited by my employer at the time to join an implementation project that lasted for about 5 years. There’s other ways to make your bones, but getting a few implementation projects under your belt is a pretty good ticket to high earnings.

Best of luck to you!

Edit: To keep this somewhat on-topic, an accounting background is a very good start to get into this line of work. ERP software is, at its core, very fancy accounting software that happens to manage other aspects of a business.

[quote]countingbeans wrote:

[quote]maverick88 wrote:

Wanted to wait until after the weekend to make sure it did not get lost. This is what I meant about invoices. Online commissions are easy because pay-pal provides invoices to receive payment but, on the weekends I have done charcoal sketches (portraits) and sold them, only cash. I will be going over $600 in the next few weeks sooner if I throw in a couple weekdays. What should be done about those sales?[/quote]

The deposits in your bank account will suffice as records of income for the transactions you don’t keep an invoice for.

The thing is, you’ll likely not be proving you actually made the income you’re declaring. As in, if you put down that you made $1300 in street art, and the IRS audits you, they aren’t likely going to want proof you made that $1300, they are going to want ot make sure you didn’t make $2600 and only put $1300 down. You know what I mean?

Just start using invoices. (Set some up, and make 100 photos beforehand, and just write in dates, etc as you sell them).

Big picture this is unlikely to be a big deal…[/quote]

First, let me commend you on your honesty and entrepreneurial spirit. I think it’s wonderful that you can make money doing something you love. And listen to Beansie, he’s a pro and knows what he’s talking about.

That being said, are you out of your fucking mind?

Put the money in your pocket, take your GF out to a nice dinner, and buy yourself an Xbox One and some protein powder.

Every time people declare small amounts of cash income, our Founding Fathers cry.

[quote]Dr. Pangloss wrote:

Every time people declare small amounts of cash income, our Founding Fathers cry.
[/quote]

lmao… Hard to disagree with this, but ethically speaking I can’t agree with it. :wink:

Ethics isn’t on my test btw.

But yeah… Just dont’ be a moron, and you’ll be fine. Well let me qualify that:

  1. A moron with good records trying to be honest will be fine
  2. A smart person who bends a rule or two will likely be fine (even though I can’t advocate bending or breaking rules. You shouldn’t do that.)
  3. A moron who tries to bend a rule or two will end up in prison.

In summary, while nobody here is suggesting that you lie to the IRS, it would probably be in your benefit to lie to the IRS, which is something you should never, ever do.

[quote]twojarslave wrote:
In summary, while nobody here is suggesting that you lie to the IRS, it would probably be in your benefit to lie to the IRS, which is something you should never, ever do.[/quote]

I’d say you’re lucky our government doesn’t share information or the NSA would probably pass your info to the IRS and an audit would be forth coming…

*only partially kidding :frowning:

[quote]usmccds423 wrote:

[quote]twojarslave wrote:
In summary, while nobody here is suggesting that you lie to the IRS, it would probably be in your benefit to lie to the IRS, which is something you should never, ever do.[/quote]

I’d say you’re lucky our government doesn’t share information or the NSA would probably pass your info to the IRS and an audit would be forth coming…

*only partially kidding :([/quote]

Ha! Luckily for me, all that money I paid my accountant means my records are impeccable.

Back on topic, that is another reason why I am glad I hired a highly-regarded local accountant. He’ll be the one handling an audit on my behalf.

I forget the name of the form I had to sign, it may have just been a type of Power of Attorney. So he would get to deal with the IRS (at least initially).

More peace of mind for me.

[quote]twojarslave wrote:

Back on topic, that is another reason why I am glad I hired a highly-regarded local accountant. He’ll be the one handling an audit on my behalf.

I forget the name of the form I had to sign, it may have just been a type of Power of Attorney. So he would get to deal with the IRS (at least initially).

More peace of mind for me.
[/quote]

FYI:

Any accountant who doesn’t do this is suspect. Part fo our service is this. Not that you might not get charged for it, but we should be assisting in any communications with the IRS you are uncomfortable with. If they don’t, or won’t DO NOT USE THEM.

However, if you are defrauding the CPA and lying to them, not giving them all the info, etc and they refuse to help you, you are one of the morons mentioned before and you should rot in hell. Because you put our professional status at stake to save $700. Dicks.

[quote]countingbeans wrote:

  1. A smart person who bends a rule or two will likely be fine (even though I can’t advocate bending or breaking rules. You shouldn’t do that.)

[/quote]

I agree.

Its terribly, terribly wrong.

I wont go into why its wrong, because its wrong wrongness is elf evident. (was supposed to be “self evident” but I like the idea that something is self evident to elves moar betta)

Also, getting caught sucks, so dont be.

Cuz they reason they take your money is that they have a standing army and you dont.

Just like there is no profit in talking to the police, there is no profit in talking to the IRS. Should you ever be approached at your home by an IRS agent (yes they do in fact do this) the first words out of your mouth should be “I want to talk with my representative (attorney, CPA, etc.) before I speak with you.” Same with if you are informed you are being audited by mail. Say nothing until you speak with qualified representation.

[quote]twojarslave wrote:

[quote]En Sabah Nur wrote:

[quote]twojarslave wrote:

[quote]countingbeans wrote:

[quote]twojarslave wrote:

You may also want to consider hiring an accountant. [/quote]

This, lol.

But otherwise a decent enough post to cover the basics given the questions asked.

[/quote]

Yes, I think that point is worth re-emphasizing, especially if you are looking to grow your business and keep everything above-board.

My tax returns when I did consulting (ERP software implementation with lots of travel) were hundreds of pages thick. I hired a real accountant who charged nearly a grand just to do my state and federal returns.

He was worth every penny. Doing it on my own would have been a nightmare.
[/quote]

What kind of ERP systems do you work with? Are you a software developer/programmer?

One of my friend’s brother makes BANK working with SAP. I’d like to start learning this stuff (primary because I want to make a lot more money and I feel like I’m going to hit the income ceiling soon) but don’t know where to start.

Sorry for the off-topic reply.[/quote]

I worked with SAP when I was consulting. I’ve since taken a salary position working with JD Edwards software. I am a business analyst, which is a more functional and business-oriented role in ERP systems implementation/maintenance.

This is pretty vague, but gives a good description of the role.

There’s a lot of ways to break into this line of work, but much of it depends on your background and your goals. The money is pretty good, with senior-level BA jobs topping out well over $100k. You can make much, much more as an independent consultant, but extensive travel, long hours and high pressure can accompany that rate of pay.

I may go back to consulting when I’m in my 40’s (I’m 34 now). For now I like my 5 minute commute, manageable hours and zero travel requirement. I make enough money, time is what I need more of now.

I broke into this line of work by getting recruited by my employer at the time to join an implementation project that lasted for about 5 years. There’s other ways to make your bones, but getting a few implementation projects under your belt is a pretty good ticket to high earnings.

Best of luck to you!

Edit: To keep this somewhat on-topic, an accounting background is a very good start to get into this line of work. ERP software is, at its core, very fancy accounting software that happens to manage other aspects of a business.

[/quote]

I may be out of luck there…I’m a software developer myself. Did major in Economics in college, but have no practical knowledge/use of it other than the basics. Was looking for something that was sort of “IT-ish” that I can maybe branch off to if I get bored (or layed off) from programming.

But thanks for the advice, I appreciate it.

[quote]moroots wrote:
Should you ever be approached at your home by an IRS agent (yes they do in fact do this) the first words out of your mouth should be [/quote]

Your first contact with the IRS isn’t going to be them knocking on your door. That isn’t how it happens.

And if they are kicking in your door, they won’t be the only 3 letter agency involved.

[quote]En Sabah Nur wrote:

[quote]twojarslave wrote:

[quote]En Sabah Nur wrote:

[quote]twojarslave wrote:

[quote]countingbeans wrote:

[quote]twojarslave wrote:

You may also want to consider hiring an accountant. [/quote]

This, lol.

But otherwise a decent enough post to cover the basics given the questions asked.

[/quote]

Yes, I think that point is worth re-emphasizing, especially if you are looking to grow your business and keep everything above-board.

My tax returns when I did consulting (ERP software implementation with lots of travel) were hundreds of pages thick. I hired a real accountant who charged nearly a grand just to do my state and federal returns.

He was worth every penny. Doing it on my own would have been a nightmare.
[/quote]

What kind of ERP systems do you work with? Are you a software developer/programmer?

One of my friend’s brother makes BANK working with SAP. I’d like to start learning this stuff (primary because I want to make a lot more money and I feel like I’m going to hit the income ceiling soon) but don’t know where to start.

Sorry for the off-topic reply.[/quote]

I worked with SAP when I was consulting. I’ve since taken a salary position working with JD Edwards software. I am a business analyst, which is a more functional and business-oriented role in ERP systems implementation/maintenance.

This is pretty vague, but gives a good description of the role.

There’s a lot of ways to break into this line of work, but much of it depends on your background and your goals. The money is pretty good, with senior-level BA jobs topping out well over $100k. You can make much, much more as an independent consultant, but extensive travel, long hours and high pressure can accompany that rate of pay.

I may go back to consulting when I’m in my 40’s (I’m 34 now). For now I like my 5 minute commute, manageable hours and zero travel requirement. I make enough money, time is what I need more of now.

I broke into this line of work by getting recruited by my employer at the time to join an implementation project that lasted for about 5 years. There’s other ways to make your bones, but getting a few implementation projects under your belt is a pretty good ticket to high earnings.

Best of luck to you!

Edit: To keep this somewhat on-topic, an accounting background is a very good start to get into this line of work. ERP software is, at its core, very fancy accounting software that happens to manage other aspects of a business.

[/quote]

I may be out of luck there…I’m a software developer myself. Did major in Economics in college, but have no practical knowledge/use of it other than the basics. Was looking for something that was sort of “IT-ish” that I can maybe branch off to if I get bored (or layed off) from programming.

But thanks for the advice, I appreciate it.[/quote]

Well, developers work in ERP systems too. As a BA, I don’t have any direct experience with that career path but I’ve worked with plenty of developers.

If you have money laying around, taking the courses from SAP might be enough to get your foot in the door somewhere. But they are not cheap. A search for SAP certifications can give you an idea. As far as earnings go, I’m not sure how much an ABAP (SAP’s proprietary programming language) developer will make compared to where you are at now.

Another avenue would be to get hired at a consulting firm. Accenture, IBM, and itelligence would be examples. They may hire you based on your background or perceived potential and then send you to the classes to get your certifications.

Don’t let some guy’s $0.02 on the internet get in the way of doing something you want to do!

[quote]countingbeans wrote:

[quote]moroots wrote:
Should you ever be approached at your home by an IRS agent (yes they do in fact do this) the first words out of your mouth should be [/quote]

Your first contact with the IRS isn’t going to be them knocking on your door. That isn’t how it happens.

And if they are kicking in your door, they won’t be the only 3 letter agency involved. [/quote]

Let me qualify this: Unless you are acting like Tony Montana. If you are acting like a fucking thug criminal and they kick down your door, you can say you want to talk to your lawyer all you want, you are fucked.

Because the only time they are coming to your house/place of business without lengthy civil contact prior is if you are acting like Al Capone.

twojarslave:

Just out of curiosity, do you enjoy being a business analyst?

I’m currently a budget analyst with a degree (soon to be 2) in accounting. We employee quite a few business analysts, but most work at our corporate HQ in NY.

I’m always thinking 3-5 years down the road and am wondering if this would be a good change for me. I admittedly have almost no idea what you do…

[quote]usmccds423 wrote:
twojarslave:

Just out of curiosity, do you enjoy being a business analyst?

I’m currently a budget analyst with a degree (soon to be 2) in accounting. We employee quite a few business analysts, but most work at our corporate HQ in NY.

I’m always thinking 3-5 years down the road and am wondering if this would be a good change for me. I admittedly have almost no idea what you do…[/quote]

I do…

Now. I have a great gig. Great salary, great hours, great boss, no direct reports.

Making your bones can be tough. Spending my 20’s on an implementation team where 60-70 hour work weeks were expected was tough. Getting catered food brought in for lunch and dinner seemed nice at the time, but the calories coupled with the long hours on top of the high stress took its toll on me physically.

The fact that everyone on the implementation team was stressed out just like I was on top of free food, free housing and per diem allowance meant we basically lived, worked, partied and fucked together. By the end of the project we were a team of overworked and strung out alcoholics who had directly or indirectly had sex with each other.

But with all of that behind me and a good 10 years experience in an in-demand field, I’m very happy with where I am at and the prospects my future holds.

With your accounting background and relatively young age I would suggest looking at the consulting firms I mentioned above. A business analyst is essentially a marriage of functional software knowledge with practical business knowledge. Many consulting firms look for people with the latter and bring them up to speed on the former.

SAP FICO (Finance/Controlling) functional consultants and BA’s can basically make a career out of specializing in just one aspect of SAP functionality. You don’t need to know everything about everything to be successful.

You’re the third person to ask me about this on these forums. I may start an “Ask a BA” thread at some point, as to not derail other topics.

[quote]twojarslave wrote:
You’re the third person to ask me about this on these forums. I may start an “Ask a BA” thread at some point, as to not derail other topics.
[/quote]

Just might be worth it.

Anywho, thanks for the write up. I’m not sure I have the aptitude for the IT side of things. I’ve taken a few IT graduate courses (System Analysis & Design (basically SDLC) for example) and wasn’t a huge fan. Although I didn’t hate it.

I’ve been using SAP for a couple of years now and I’m not sure the maintenance side of things would be enjoyable either…

[quote]countingbeans wrote:

[quote]countingbeans wrote:

[quote]moroots wrote:
Should you ever be approached at your home by an IRS agent (yes they do in fact do this) the first words out of your mouth should be [/quote]

Your first contact with the IRS isn’t going to be them knocking on your door. That isn’t how it happens.

And if they are kicking in your door, they won’t be the only 3 letter agency involved. [/quote]

Let me qualify this: Unless you are acting like Tony Montana. If you are acting like a fucking thug criminal and they kick down your door, you can say you want to talk to your lawyer all you want, you are fucked.

Because the only time they are coming to your house/place of business without lengthy civil contact prior is if you are acting like Al Capone. [/quote]

Yeah definitely man, I wasn’t trying to imply that it’s likely that out of the blue the IRS is going to come to people’s doors as a first contact. And it’s more likely they’d do this as part of a criminal investigation. But it is something that they can do and I still stand by my statement that there is no profit in talking to them.