Anyone over 6 figures actually filing as a Pro?
 

So filing as a pro you face an additional 15% self employment tax, but you get to write-off all business-related expenses.

But if you're making $100K+, that means you would have to have more than $15K in expenses for it to be worth it. Right? I don't see why anyone pulling significant dough would file as a pro.

Re: Anyone over 6 figures actually filing as a Pro?
 

how far can you take business related expenses? computer? car? hotel rooms in Vegas?

Re: Anyone over 6 figures actually filing as a Pro?
 

Ya but as a pro you can pay taxes on just your net income, while if you don't file as a pro you have to pay taxes on your gross and deduct your losses. So even without expenses filing as a pro may be economical for something making 6 figures.

Re: Anyone over 6 figures actually filing as a Pro?
 

The 15% is for your SS and Medicare, so it's not like it's thrown away, and it's not really 15% because some of it is deductable. You also get to put 25% up to 40% pre-tax away in a SEP IRA.

So, along with deductions, that's why you file as a pro.

Nigel

btw - I am not an accountant so don't take the above as solid advice. :-)

Re: Anyone over 6 figures actually filing as a Pro?
 

"But if you're making $100K+, that means you would have to have more than $15K in expenses for it to be worth it. Right?"

I think you need to look up what a tax deduction is. It's quite a bit more than 15k in expenses to break even.

Re: Anyone over 6 figures actually filing as a Pro?
 

"Ya but as a pro you can pay taxes on just your net income, while if you don't file as a pro you have to pay taxes on your gross and deduct your losses."

This should make no differece in your net income aside from the standard deduction and a few other minor concerns.

Re: Anyone over 6 figures actually filing as a Pro?
 

"The 15% is for your SS and Medicare, so it's like it's thrown away , and it's not really 15% because some of it is deductable."

My first ever FYP.

Re: Anyone over 6 figures actually filing as a Pro?
 

You only have to pay that up to 86?k in income

Re: Anyone over 6 figures actually filing as a Pro?
 

The SS that is, the Medicare has no cap

Re: Anyone over 6 figures actually filing as a Pro?
 

I think it's 2.9% of the amount above 90k or something now.