The Official Tax Question Thread

[TaxGuy]

I am in the process of learning the tax code from a true professional, my dad, who has over 35yrs experience and has focused solely on taxes in the last 22yrs with business startups also being a specialty of his.

With that in mind, we would like to know what your pain points are as Fastlane entrepreneurs either in planning for taxes or how to setup your business. There are plenty of threads on this, namely from Diane Kennedy(i.e. the one stickied thread in this sub Forum- https://www.thefastlaneforum.com/asset-protection-taxes-legal/3350-business-structure-basics.html and GlobalWealth, however, it would be nice to have one central thread for questions, so with that in mind, ask away

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[TaxGuy]

Tax season is here! While we have been uber-busy in building up our business you can see that instead of out partying I'm here on the Fastlane at 12:36 AM on a Sat night

With that in mind, what are your tax questions?

If you want to remain anonymous, please PM us and we will post the answer to your question with your name removed. Please keep in mind that taxes are a pain point for EVERYONE, even if you think you have the best accountant in the world, chances are if you are complaining about taxes at all, then you need a better tax preparer/consultant

So ask away and we'll do our best to answer whatever questions you may have!

 

[MikeC]

Hey. Thanks for doing this. I'm extremely new to taxes so if this thread stays alive, I'm sure it will be a great resource.

I actually have an accountant right now. She told me that I need to get a separate account to keep all the money in that's coming from my business. I assume this is more to help me out come tax season than something that is actually required. Right now I put all my business earnings into the savings, and then record any money that I transfer into the checking account. Is this okay? She said to have two different checking accounts, and write a check to myself to transfer money, but I needed a savings account anyways, so I cut a little corner. Just curious as to if I need a separate checking account, or if I'm fine how I am. Thanks!

 

[TaxGuy]

This is more of a book-keeping/records question, however, it is a good practice to keep ALL business transactions separate from personal transactions.

As far as whether you have 2 Business Checking OR a Business Checking and Business Savings Accounts, it's up to you. That .000001% interest you earn on the savings account is better than nothing, however, it is still reported to the IRS and needs to be filed with your taxes. Unless of course it is less than $0.50 in which case it would be entered as "0" on your return.

As far as tax related questions, a good example would be:

"I am in real estate, can I deduct the mileage I drive to work on my properties? In addition, do I count my rental income as Passive or Non-Passive income?"

The answers would be: YES to deducting business mileage(and try to keep a log) and "Passivity" of your income depends on how many hours you spend on your properties. If you average 20hrs/wk then you could claim your real estate income as "Non-Passive" and have a more favorable tax treatment.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[MikeC]

Great, thanks. I figured it would be a more record keeping aspect, but wanted to make sure.

 

[SpeedRacer]

From my accountant contact: Separate accounts necessary if you've setup a business entity to protect your corporate veil in the event of a liability issue arising.