Taxes

Matt Bowler matt at mattbowler.com
Tue Feb 8 22:45:29 MST 2005


Sasha,
I have had a small business on the side for a few years, and this is what I
learned:

1) If you count hardware as deductions, you MUST pay property tax on it
through the county. They may send you statements to report it, and even if
you are not counting anything you still must report $0.00.

2) When setting up a business you are asked your annual estimated revenue.
The state uses this to assess your business tax and if you don't file
otherwise THEY STILL BILL YOU FOR THIS AMOUNT.  If you have $0 profits, or a
loss, you MUST REPORT YOUR EARNINGS, EVEN IF $0.  I made the mistake of
thinking I did not make any profits one year, so there was nothing to file,
and it was a HUGE MESS to get everything straightened out.  File all of your
taxes whether you owe or not, because the State estimates.

3) Auditors at the State Tax Comission can be very helpful in helping you
decide what is taxable and what is not.  But I highly recommend you read the
state tax code first
(http://www.le.state.ut.us/~code/TITLE59/htm/59_0D003.htm), because they
tend to want to include more than is necessary, as they do not understand
"tangible personnal property" as it relates to IT consulting.  Basically,
code added to software to make it more valuable counts, but configuration of
existing components does not.  You can also stop in and visit with them
(appointment preferred) at their office at:

150 East Center #1300
Provo, Utah 84606
Phone (801) 374-7070
Fax (801) 374-7089
Hours: 8:00 am - 5:00 pm, Mon - Fri

BTW, I think you have an AWESOME billing structure.  A very high standard
that I wish more people adopted.

M.

-----Original Message-----
From: plug-bounces at plug.org [mailto:plug-bounces at plug.org] On Behalf Of
Sasha Pachev
Sent: Tuesday, February 08, 2005 9:18 PM
To: pluglist at plug.org
Subject: Taxes

Hello, everybody,

This is going to be less OT than some of the threads have been. If you are a
Linux hacker, you might have a consulting business. And if so, figuring out
how you pay your taxes is a part of it. So this is somewhat on topic :-)

As some of you may have noticed or heard, I am now a full-time independent
consultant for the first time. Things are going well so far, except I need
to figure out how I am paying taxes to make sure IRS does not hit me with a
fine, and also to make sure I do not pay more than I have to.

Questions:

Does anybody know of a calculator that will tell me based on my expected
annual income, family size and estimated deductions how much tax I owe per
quarter for both state and federal taxes? I have found one on Intuit site
that kind of does it, but it does not do deductions/child tax credit/etc,
nor does it do state taxes. (And to keep this on topic, it has to be
Linux-compatible).

If I did fine without a CPA when most of my income came from a W-2 type job,
do I need one now?

Any other tips?

--
Sasha Pachev
AskSasha Linux Consulting
http://www.asksasha.com

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