2005 Taxes

Folks,

As I try to make clear from time to time, we work to support a lifestyle, and
our work supports our
lifestyle. (I have a new working definition of success too: the point we worry
more about time than
money, that's when we turn successful).

The tax codes and such in USA still to some extent make small biz self
employment attractive, and
in keeping with this, I recommend you carefully pull together any expenses you
incurred, or
reasonably could have incurred, in your process of startiing a biz, and share
these with your tax
prep person.

Now I am no accountant, CPA or finance wiz, so let me start by saying CHECK WITH
YOUR CPA. (If
you don't have one, check with the local Small Biz Admin or the back page of
local newspapers for
small biz accountants.

Correct me if I am wrong, but here is how it works: You have a household income
of say $60,000,
you spend $20,000 on your biz, then your taxable income is $40,000. If your tax
rate is 25%,
then you got $5000 free money toward your business. Of the $20,000 you spent,
so much is
"dual use" (rent, cellphones, car) that it is ultimately lifestyle support.

And I do mean correct me, any of you CPA's want to clarify and expand, I'd be
much obliged... for
my part my cpa takes my records and hands me a bill.. that is all I know.
(Although he did make
my sabbatical to finish a bachelors degree and gain a masters degree a biz
expense...again, a
lifestyle choice my biz "paid" for.)

If you have no biz expenses 2005, perhaps you ought to buy 2 hours of a CPA's
time this January
and ask what spending say $5000 on starting a biz in 2006 would "cost" you, and
what it may
gain you.

My mind races ahead, you CPA's ought to offer noncredit courses in your local
community colleges
"How much you have to spend (as in can afford) on starting your own business"

John

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