Cracked, I am in Raleigh, NC. I usually work until around 2-3 in the morning. Sometimes though I take a nap during the day. That is a good deduction. Thee are millions of people Im sure who do similar things. I remember my tax prof saying that when they started requiring SS # for children deduction that a few million kids disappeared that year.
Ok, sorry i'm not up as late as you guys. My comments are back a few pages. I have no family. I'm just talking about deductions for myself. If I ask a trader on this board to meet me at the "it's a small world" ride to discuss scalping, and it's just me, then the airfare, hotel, rental car, and admission is all deductable. If I bought cotton candy though, that's only a writeoff if we both shared. If I brought my girlfriend along, her expenses aren't deductable though, but my portion of it are. That's how I understand things still.
Let me pose a dumb question. Suppose, I make 10k in a year. I should owe about 3k in taxes. Then I have a valid trading business trip which costs 3k. Does that cancel out 1 to 1 with the taxes I owed and then I don't have to pay anything? Also, how do you guys report your computer equipment? Do you divide it up to 4 years or report it all at once? What book do you guys recommend that have good examples for trader taxes regarding reporting expenses? Thanks!
For computer equipment, there is some magic number and under that number you can deduct the whole enchillada. It's enough for you to buy 2 new pc's some 21" lcd monitors and a plasma tv and have some left over for a nice desk each year.
$2,500 for 401(k) admin & prep is dirt cheap especially if that includes preparation of the 5500's. If $2500 was too much a 401(k) was the wrong plan. She should have been looking at SEP plans instead.
For a 5 person buisness $2500 is a rip off to for a 401K plan. Both her and her partner already have seps set up.
For a five person business there really doesn't seem to be any reason to pay 2500.00 for a 401 K plan. I suppose in some cases you might want to do this but I cant think of any at the moment - other than to transfer fees to your buddy who is administering the plan or to possibly minimize taxes. The wonderful SEP program is simple to administer - you could literally set one up in about an hour for five people. This is one case where the acronymm really works: "Simple" it is - and very low cost.
Cal, I could not agree more. Even with hypothetical funding of 100K, that would be a 2.5% vig just to overcome. Plus there was no real supermarket of funds to choose from, which means you can add another 1-2% in 12b-1 and management fees. But I suppose the people who sell them will give you 10 reasons why the fees are worth it.
I have not looked into my electricity bill. (I could have someone put a meter on the line between the power source and my computer) Let's say that I take 10% of my utility bills for the business(Home office) My computer is online ten hours per day. For example, is it possible that my computer is costing me 80% of my electricity bill? Jeffrey