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Discussion Starter · #1 ·
Quick tax question for those out there operating under an LLC: I just started my own home improvement business. I worked for a builder for 8 years, then went into a different trade for the last 7 years and decided its time to get back into construction again!

Within the last month I have acquired an LLC, and took out a loan for $6,000 to buy a trailer and some tools. I'm just wondering if I should buy my equipment before the 1st of the year or wait until after the 1st? Keeping in mind I'm not quitting my current job until I have the equipment/tools and have not brought any money in under my business yet. If I wait, will I be taxed on that 6K sitting in my business account?

Thanks,
Jobes
 

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Discussion Starter · #3 ·
I'll call him again tomorrow. He was gone from his office by the time I heard I would get taxed on the unspent money in my account. Thank you!
 

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I would get taxed on the unspent money in my account. Thank you!
That's not really how it works. Save your money until you get in touch with him.

I can say with some confidence that it does not matter what your cash flow position is at the end of the year, rather your profit and loss statement and balance sheet.

CPA's have even more crap to figure out than us lowly contractors trying to figure out all the new codes every day.:clap:

Gotta love the government!:censored:

You probably have plenty of deductions that you can apply to offset the profit that you don't even know about as long as you keep good records.
 

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The biggest thing I did wrong this year(first year for me) was buying a couple things I could have held off on. It's not like I really went nuts, but I probably ended up spending a grand or two I could have waited longer on. Like, even though you know you're going to need the roto hammer, wait until you have the job that requires it before dropping that $250 on it. Better it sits in your bank account and does something for you.
 

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Quick tax question for those out there operating under an LLC: I just started my own home improvement business. I worked for a builder for 8 years, then went into a different trade for the last 7 years and decided its time to get back into construction again!

Within the last month I have acquired an LLC, and took out a loan for $6,000 to buy a trailer and some tools. I'm just wondering if I should buy my equipment before the 1st of the year or wait until after the 1st? Keeping in mind I'm not quitting my current job until I have the equipment/tools and have not brought any money in under my business yet. If I wait, will I be taxed on that 6K sitting in my business account?

Thanks,
Jobes
that is a loan not profit. you will be able to deduct your interest on it too. also the llc you can set it as a self proprietor(work under your social)
Any tools you buy are also deductible.
But like the others said why would you buy tools if you do not have the jobs yet. if you have a friend you can borrow tools from them.
 

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Quick tax question for those out there operating under an LLC: I just started my own home improvement business. I worked for a builder for 8 years, then went into a different trade for the last 7 years and decided its time to get back into construction again!

Within the last month I have acquired an LLC, and took out a loan for $6,000 to buy a trailer and some tools. I'm just wondering if I should buy my equipment before the 1st of the year or wait until after the 1st? Keeping in mind I'm not quitting my current job until I have the equipment/tools and have not brought any money in under my business yet. If I wait, will I be taxed on that 6K sitting in my business account?

Thanks,
Jobes
You might get charged from the interest you gain from your business account . If your money is sitting in there without earning percentage then no . that is not called profit.
Also LLC have to pay quarterly taxes . SELF PROPRIETORS NO .Once you make money you can start prepaying your taxes every quarter .if not you will pay penalties ,but this is only once you start making money.
 
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