Dave, Thank you for the many occasions you have shared your extensive business expertise with the TGF. Kathy On 3/7/2017 7:46 PM, Dave Liesse wrote: > Some input here from the tax professional (that's me): > > 1. I would say 812990 is the more appropriate code. The debate in > our discipline notwithstanding, we're not considered a "profession" > by most others and genealogical research doesn't really fall into > the 514 series. Incidentally, the NCIS Manual is available at > https://www.census.gov/eos/www/naics/ if anyone would like more > details than just the list in the IRS instructions and > publications. (As a side note, if you ever get in a dispute with > the IRS their own instructions and publications are NOT considered > valid authority; refer to the Internal Revenue Code itself for > guidance.) > > 2. For tax purposes, books are generally non-depreciable assets > because they have no specific useful life. I carry my own (the more > spendy ones, anyway) as assets on the books, but that's just for the > additional practice with depreciation and to give myself some NDAs > to test my software from year to year. It's much easier to treat > them as expensed items from the start. > > 3. You'll want to check every year on whether computer software is > eligible for the 179 deduction. It is no longer eligible for > "special depreciation," but that can change with the whims of the > Congress. Again, most of it can be expensed but if you want to > depreciate it, it has a 3-year asset life for tax purposes. > > 4. All income of any nature must be reported, of course. Where you > record the expense is highly flexible (in the long run there is no > penalty if you report an expense in the wrong category on a tax > return unless it has a material effect). If you actually purchase a > document and provide it to the client then you could make a case for > recording it as Cost of Goods sold. I'd be more likely to just > include it in "other expenses" -- suitably listed in the statement, > of course. A good catch-all phrase is "reimbursable expenses," but > that will work only if you itemize such reimbursable expenses on the > client invoice. If you don't then they're still deductible but > since you're not being specifically reimbursed you need to put them > somewhere else. Again, it makes no real difference in the end, but > if you happen to get audited and get one of the (very few) > unreasonable examiners you'll win but not until after a good fight. > > For those on the list who are APG members, their very first webinar > was produced by my colleague from the other side of the country, > James Beidler, whose full-time job also is Enrolled Agent; this > webinar is "Tax Considerations for Your Genealogy Business." It's a > few years old, now, but still mostly valid. Later this year you can > expect "Accounting for Genealogists," currently being designed by > Yours Truly. This might end up being a two-part series, but we'll > see; I won't be putting a *lot* of time into it until after tax season! > > If anyone has any specific tax or accounting questions you don't > want to air in public, feel free to contact me directly. No charge > for quick answers. > > Dave Liesse, EA > Skingco Services, LLC (my current company) > Central Tax & Business Services (the company I'm in the process of > acquiring) > > > > On 3/6/2017 09:08, Teresa Kahle wrote: >> Hello to all, >> >> Last year I transitioned to taking clients and now I am trying to >> get my taxes done. I have a few questions specific to our >> profession. (Preliminary data show I made a profit!) >> >> I am a single owner LLC, have no employees, office at home, nothing >> fancy going on. >> >> I used to work for H&R Block many, many years ago so know the >> basics and I’ve read all the relevant IRS Publications, but am >> nervous this being my first time to file for this business. >> >> 1. What Professional Activity Code do you use? >> >> 2. How do you deduct books? I’ve bought a ton of books this year. >> Some I am deducting as “Business start-up costs” but am not sure if >> the others are business deductions, 179 deductions, or if I need to >> depreciate them. The question seems to be is the book’s usefulness >> greater or less than one year? Do any of you go the depreciation >> route? >> >> 3. How do you deduct computer software? It appears to be a 179 >> deduction? >> >> 4. Where do you include the cost of obtaining certified records or >> DAR record copies or the cost of DNA testing you paid for on behalf >> of the client? >> >> >> Thank you for any advice you can give, >> >> >> Teresa S. Kahle >> The Intrepid Sleuth >> www.theintrepidsleuth.com >> >> “They who are indifferent as to their origin will likely be >> careless of their destiny.” - Edward W. Spangler, 1896 >> >> >> >> >> >> >> >> >> >> >> ------------------------------- >> To unsubscribe from the list, please send an email to >> TRANSITIONAL-GENEALOGISTS-FORUM-request@rootsweb.com with the word >> 'unsubscribe' without the quotes in the subject and the body of the >> message > > > > ------------------------------- > To unsubscribe from the list, please send an email to > TRANSITIONAL-GENEALOGISTS-FORUM-request@rootsweb.com with the word > 'unsubscribe' without the quotes in the subject and the body of the > message