You can't do both vehicle depreciation and mileage. One or the other for the work truck /van. Once your vehicle is depreciated you can take mileage. My last work truck I was tracking mileage. Another way to reduce your taxable income is by opening a SEP IRA. Once you do your taxes you will know how much you made. You can put up to 25% of your income into that SEP.
@@TheHandymanBusiness I think you got talking to fast and forgot to say it's one or the other. That's why you always say to check with a tax professional. 💲💲🦌
A friend who owns a small business was audited years ago, he gave the IRS 4 big boxes 7 years of business papers all mixed up and he said that's all I got. A week later the IRS called him and asked him to pick up the boxes. The boxes was not even opened, it was in the same condition as when he dropped them off. He never heard from the IRS again. 🤣
The reason the IRS gave everything back untouched is because paying income tax is voluntary. But hardly anyone knows this. The IRS has the bluff on the majority of the population so it doesn't matter when someone like this slips through the cracks.
My dads friend ran a pizza shop in NYC. An IRS agent stood over his shoulder at the register on a busy day, and extrapolated how much sales tax was owed. Insane.
You should sign up with lowes, homedepot, etc. online accounts that way you get all receipts electronically. Then whenever they appear in your mailbox put into a seperate folder titled (receipts for taxes) or something like that. Makes life a lot simpler. Love your channels btw!
It’s rare to get this helpful of advice, I know it’s weird but I really look up to you man thank you for sharing this! I’m a novice woodworker that sells furniture on the side and your videos have helped me a ton.
Couldn't agree more on having an accountant. I got audited a few years back and couldn't sleep for days, they ended up finding a $32 discrepancy over 5 years of taxes.
My CPA hates me lol I don’t/ won’t pay quarterly as I do seasonal work. I am an LLC I do pay my taxes but I don’t stress over things like being on time lol My CPA takes care of the rest I don’t save receipts as they are usually available online. I have a card I use for business expenses and only for that. I don’t even chase slow paying customers, I let my automated email reminders remind them every 2 weeks until they pay and I don’t even bother to stress it. Still at 100% for being paid
The more I watch your videos the more I realize that my house is not in order and I thank you for that! I have a regular day job and have been working nearly every night and weekend as a handy-man/general contractor. With all this work, family life and ADHD (unmedicated) it is extremely hard to find out what I should be doing especially on the bookkeeping part. Great video and love the scanner! Im going to order one. It will be so much easier to keep them sorted on my NAS then to have to go through my shoebox every year at tax time. Thanks for sharing your experiences and advice!
Do this by job, property etc. do it monthly to ease workload. Or spend an hour every Saturday morning, that’s what I do, at end of year three hours I’m done. My wife for her business take month and a half to accumulate and categorize her receipts. Big pain.
I'm up every morning entering this stuff into Quickbooks. It's when you want to take out a loan that you realize how important keeping good records really is for the small businessman.
Good day handyman. We all just really appreciate you and all you do to help out. In the many ways of running a buisness. All the best and continued success brother 👍
Appreciate all the insight! just starting my flooring / tile business and your videos are enjoyable and have a ton of good helpful tips in them. thank you sir!
You're a really good man bro. I don't have anyone to teach me this. Wasn't taught much at all from my parents growing up so I'm out here learning it all myself on everything. So videos like these really save me. Especially in the future! I know it's a headache trying to make sure you're always doing all this right but man it's so much better knowing I can go go to bed in peace not wondering when the IRS is coming for my assest. The receipt printer alone is a savior. Not including the tax advice and advising getting a CPA.
Those copy machines are cool but your phone can do all that with no extra equipment. I use the app turbo scan that uses my phones camera. It takes a picture and converts it to a PDF. Thanks for all the killer info you provide. I’m thinking of starting my own channel thanks to your content.
You are wonderful. I love both your channels. I have been a do it your self'er for about 26 years. You have so much useful information. I love it. Thank you very much.
Lowes and home depot email receipts. Home depot's pro extra provides complete purchases as well. Hate to say it but we all carry a scanner in our pocket.
Also, if you sign up for a HD account, you can tie your credit card(s) to it, and it will give you your purchase history, along with e-receipts of past transactions. Saved me a few times when I lost a receipt.
I don't know if this is a helpful tip for anyone, but a friend of mine has a small business and he pays a set fee every month to an accountant and they input all his receipts and do his accounts monthly. Saves him a lot of stress - he just hands over all his receipts each month or periodically. Most people say they will do it all themselves, but many leave it all until tax time, which is stressful all year as you watch those receipts build up towards tax season....especially me...I'm a procrastinator...yikes. Even just pay a part-timer to scan and enter the receipts for you - that's the worst part...but you're right - A good accountant is worth their weight in gold - they will save you tons of money
My income for the past 20 years has been from the cap gain on the house I live in. I buy a fixer, move in and fix it up and sell. the cap gain up to $250k is tax free. I've done 3 in 20 years, working on #4 now.
I keep track of my expenses on a spreadsheet on my phone. I immediately tally it up, and put an X at the top of the receipt, so I know it’s counted. I don’t wait until the end of the year. You always have an extra minute to do it right away, rather than a big marathon at tax time. Then I email backups of the spreadsheet to myself ever now and then.
@@tylerblack3508 Google sheets. You can always download a copy as a backup in Microsoft Excel. I have developed all my own spreadsheets over the years. I think they are pretty good. Estimates, timesheets, financial sheets to keep track of profit and sales tax owed. I have a full set of spreadsheets made up to run a business.
"They do not want Walmart bags full of receipts"......WELL WHO GIVES A CRAP WHAT THEY WANT ? Those bags full of receipts are as legal as your scanned in version.....why make life easy for the IRS ? You force them to spend hours and hours pouring over records and get nothing in return, and they won't bother you in the future.
That's a great idea. Piss off the IRS agents auditing you. Also, those paper receipts fade over time so the records you need may not be readable in a few years and guess what the IRS is going to say about that...
Well, the problem is, you are forced to sit there as they go through all those receipts. I've been there. Mine were in an expandable folder, so at least they were flat. It took 2 days.
As a CPA that focuses on taxes...this is not bad. Couple of parts are incorrect, but overall not bad. I like that you emphasize making the tax professional a part of the business. Maximize deductions without taking the risk of just deducting everything under the sun.
lol my google in my office started answering your questions as well! great video, i am at this point in my company as well where i cant stress enough to my other friends just starting that they must get a chartered accountant that will cover your butt in the long run.
I took an accounting class at the tech school this summer purely because the only part of business I put zero effort into before was all the paperwork and receipts for tax season. Now that we’re making more it’s time to care about who’s taking my money! Haha
The extension is only for filing and not for the balance due. So make sure to pay on time. The failure to file penalties are based on the percentage of the tax due on the 1120-s. You can also always request abatement if you feel it feels under reasonable cause.
In my experience it's best to have a system of recording tax data ( that works for you ) so at the end of the year you don't have a headache putting it together for your accountant . Every bit of business income and expense should have it's place so that you take advantage of all legal tax deductions. Be sure to pay estimated taxes on time and work with a great accountant . He's worth every penny.
Ever thought about doing a video on health insurance for the self employed? I have a full time job but my side hustle is blowing up. I'm starting to think about my plan to transition and health insurance is a must with three kids. Thanks
If you want the most deduction on a work vehicle your better of leasing a truck/van you can write off that lease during the whole term and also include your mileages and fuel cost... Love you videos thanks
I suggest that you use quick books to write your checks and classify your checks into expense accounts as you write them. Always pay for business expenses with a debit card, a check, or a credit card so that you will always have documentation.
Agents work on commission. My father rented motor homes as a business, and even the IRS rules were confused, at the time. Is it a second home, is it a coal truck, etc. He went in, and they agreed to see it his way. But he had to come in. (take a day off, and spend it at an IRS office).
Probably the most helpful video I've ever watched thank you very much I'm gonna get those receipt scanner as well very informative sir....I'm a few years behind you but growing quickly I'm very stressed about the tax part ....I'm getting a book keeper tax person whatever they are lol...an I hope they can relieve me if this dark cloud following me... fucking taxes
You could save yourself a lot of time by skipping the scanning. If you have a rewards or pro account with Lowe’s and/or Home Depot and link it to your business credit card, all purchases made on the account can be exported onto an excel spreadsheet.
Thanks Brother great video. New sub and also new S corp owner its hard to find good or free advise on how to operate more effective and efficiently and the accountant aint offering up any tips to reduce the life sucking taxes so its appreciated a lot. Ill search your channel for more helpful vids
I like your channel, I don't think that you're arrogant or anything negative, I think that you're actually kind of humble considering what you've achieved the fact that you get haters it's typical. Once I started having a little bit of success as soon discovered make everything one person in my inner circle it didn't hate the fact I was making good money
My previous landlord here in Canada is a corporate accountant, and he told me 'you can allow for anything you want, but if Revenue audit you, they might not accept it, and you will have to pay them back - so don't get too creative' LOL E.g. If you have a company car, but it's your ONLY car - they may decide you must use a portion of it for personal use and not allow you to claim all...it's really up to an auditor's discretion
Funny - I'm an accountant and do the taxes for a bunch of family members (some have small businesses) and for me it's ridiculously easy!! Most non-accountants think it's magic....the black box of accounting. Just like you with your home repair customers. They think you do magic. It's all education and experience, although I'll take on any home repair job too and I love doing them!
This is awesome! I would totally let them have all the paper receipts 😂. Regarding audits, they don’t even really look at you if your making under 40K/month, just saying lol. But yes you are 100% correct! Get a good CPA!
Correct, but the IRS also looks for abnormally large deductions that may be uncommon for that tax payer. My sister got audited one year because she made a large donation. They make under $100k.
Unfortunately that is not correct although it may not be common. My husband is a self-employed handyman and we were audited a few years ago and we made under 40,000 that year. It was stressful because it was at a time of a lot of major life changes and health issues which meant that our record keeping was not at its best that year. It was beyond stressful but we survived. Although our records were in disarray we were honest and after examining our records thoroughly we were not penalized. We were doing our taxes ourselves; I highly recommend finding a tax professional that you can trust.
My advice for you is keep making the video so I can keep learning... My goal is by the end of the year to start my own handyman business... My profession is electrical So I'm thinking of actually getting the electrical contracts lisince but can I mix & mingle handyman license and electrical license? In California as a handyman were only allowed. 500 dollars, total material and labor included... Do you have those restrictions? Do you hold different licenses to get around that???
Your sitting in headquarters! Two years ago didn’t claim bc I didn’t make that much and was so young(18) but if I could take it back I would have claimed bc it messed me up w loans bc I had no proven income
I'm currently 18 will take your advice and start doing that next year currently gonna just claim my deductions for this year got a new car also some capital gains losses and some other stuff I hate having all this tax bs but.
I've been that guy with a truck and tools for about 4 years now. I can say I've done just about everything when it comes to residential remodeling, interior and exterior. But I've always been an under the table kind of guy. I get 100% disability from the military, my income from that isn't taxed. So I've never dealt with doing taxes. I've always just cashed checks at pls or what not. My jobs are becoming more "Profesional" now and we'll the checks are getting bigger. I'm been a fan of yours for a while now and with a lot of your advice I'm officially launching my business come next year. I just wanted to take some time and appreciate you for the knowledge you've shared and the time you've sacrificed to teach men like myself a thing or two or three or... on how to go about things in this business. Blessings to you and your family.
Handyman you can’t take the mileage if your going to depreciate your truck. You can either take the actual expenses or the miles but not both. Love the vid keep them coming.
ditch the hard drives as primary...get a cloud based storage system (tax deductible). Also the iphone has a 'document scanner' built in...but i do like that little scanner
Agreed. What a nightmare if his laptop catches fire (kinda thing). For all we know he may be using Dropbox, but I'm always surprised by people I know who run businesses that are afraid of storing anything in the cloud. They have this idea that if it's in a cloud, everyone can go there and look at it, and there's nothing you can say to them.
A few hints, tips and apps I've picked up over the years: Everlance will track your mileage from your phone good app. Home Depot and I think Lowes will have an option to email your receipt, easy to track. You can fully write off a vehicle if you either lease it or pay in full, otherwise you can just right off interest paid towards your vehicle on a loan. Meals for yourself 50% write off, meals for clients 100% write off. I know there is more but some good ones to keep track of.
@@sparksmcgee6641 I recommend talking to a tax professional, which is what I did. But you can't trust everything you hear on the internet so do you own research as well.
Wanting to start my own handyman company… this is the most nerve wracking part for me… TAXES!!! I’m not sure if while I make the move to starting an LLC if I should look into getting an accountant.
One last thing. Make it as hard as possible for the auditors. The more resources they waste trying to collect, the less they will audit. Being audited is VERY stressful but so is going to court for a traffic violation. Fighting it gives a better outcome and slows the "road pirates" from bending us business over the barrel too much.
Not true. It’s YOUR problem to prove your deductions with documentation. If you can’t prove it, the IRS doesn’t allow it. And if your receipts aren’t reasonably well organized, they just reject them. Been there. 🙁
Hello friend have a question can help me how much to charge for a exterior door 48”x80” that a heavy door to the installation and painting. I’m waiting for asking.
Thats why i do all my jobs under the table, cash prferably, hell i barely make it as it is, wood is so expensive now wire too jesus, thankfully im retired and dont do that many side jobs anymore.
Very illegal... People like me who runs business by the book and pay income taxes, laugh at people who don't. Not too smart on your decision to run an illegal business. Not to mention unprofessional !
I'm not a handyman but I am self-employed. I too am a LLC that is taxed as an S-Corp. I have an accountant (accounting firm actually) that not only does my taxes but also my bookkeeping and even though its just me and no other employees, payroll. Why payroll for just me? That was my accountant's advice. He said the government wants taxes, and they especially want to see you paying at least some social security and FICA (medicare/medicaid) taxes. So my LLC gives me a W-2 every year. Between what I pay the accounting firm (also a deduction ) and the taxes on both side of the pay check, employer (deduction) and employee (not a deduction), it costs me several thousand dollars a year and I feel having an account has been worth every penny. I avoid the big bag of receipts by putting everything on a business credit card that my accountant tracks. I still have to keep up with which expense is for what client/job.
Every year, only take 99% of deductions, the other 1% is for audit insurance... pretty cheap for a few bucks a year. IF the auditor ever comes, you start "finding" those deductions you missed for that year... they shut up fast and leave if instead of a check, they could leave with a bill.... with an apology for bothering you.
I have noticed that in many of your video's you link an Amazon store account vs using affiliate links in the description, have you found this to be a better solution then affiliate links or is it just easier? Do you still get the 24hr cookie when you do the store?
I just do my paperwork after i finish each job. I load the numbers in an excel spreadsheet. Every purchase is with a commercial card so I dont have to save any paper receipts (but i do anyway). Tools, office supplies and advertising costs are all bought with credit accounts so its already tracked. Mileage is easy as i have another vehicle not for business. I give the business expenses/income (calculated by excel formulas) on one sheet of paper to my tax pro and viola none of what youre going through.
