#1
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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. |
#2
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Re: Anyone over 6 figures actually filing as a Pro?
how far can you take business related expenses? computer? car? hotel rooms in Vegas?
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#3
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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.
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#4
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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. :-) |
#5
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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. |
#6
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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. |
#7
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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. |
#8
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Re: Anyone over 6 figures actually filing as a Pro?
You only have to pay that up to 86?k in income
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#9
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Re: Anyone over 6 figures actually filing as a Pro?
The SS that is, the Medicare has no cap
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#10
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Re: Anyone over 6 figures actually filing as a Pro?
I think it's 2.9% of the amount above 90k or something now.
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