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Discussion Starter #1 (Edited)
If it cost me $1.22 per shirt do i consider this an expense even though this is actually part of the cost that the customer pays? Which is it? Write off or not?

Also what about the gas you spend driving back and fourth to the printer?

If I spend about X gallons a week in gas JUST TO DRIVE TO AND FROM THE PRINTER how should i seperate it from regualer daily driving.

Could I say 12 miles round trip once a week to printer

12 X 52=624 miles a year X average price of gas(ex $2.25 a gallon for the year)??


624 miles X $2.25=$1,404 a year

Here is a good article I found I thought it might be helpfull to some.

http://www.businessweek.com/magazine/content/05_07/b3920114_mz070.htm
 

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Good info in the article. The car thing... There are 2 ways of writing off your car.

1. Keep track of actual business miles and get $.46 per mile deduction on your taxes.
2. Keep track of all auto expenses for the year and deduct a percentage of the vehicle expenses, gas, oil, tires, brakes, everything. You can also depreciate the vehicle with this method. I write off 75% for business use. That seems to be about the happy number.
 

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Discussion Starter #3
Ok, thanks 3oates.

Everything must have a recieipt, correct? There are a few things I don't have have a reciept for, they are not are not that costly.

This is basically for IF you get audited, correct?

For example so far I have had to buy

Computer
printer
software
paper notebooks
vendors lic
1 copyright($30.00)
website
130 t shirts Large through 3x
gas

All of these I write off next year against whatever income I make, correct?

If I trade mark my company name it will cost over $300.00 that should a write off also.

I will actually start selling shirts around April 10th.
 

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my understanding is that you don't really NEED the receipt unless you're being audited. I try to charge as much as possible with business expenses so that i'll always have the proof of my caredit card statement in the event that i can't track receipts.

you have to be creative with the expenses...your internet bill, tolls, all kinds of stuff.
 

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Hi johnsmith, can you link to the article instead of posting the full article here (for copyright reasons).

I write off a lot of things based on what my accountant tells me :) As a "business for self", you have to be careful about writing off too much. The IRS gets itchy when they think you're trying to cheat them.
 

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Hi Johnsmith,

This is a basic explanation that a tax preparer can explain further.

As far as write offs are concerned, you can write off every single thing that you have to spend money on in order to run your business. If it is not directly related to running your business, then do not write it off.

Things you may write off are computers, software, t-shirt supplies, inks and printers, stationary, travel expense including gas, maintenance and repairs, a home office, home phones, cell phones, advertising, website expenses, screen printing expenses, postage, artists, seminars, magazine subscriptions, business insurance etc, etc. Everything that costs you money in order to make money is a write off, including the fee your tax preparer charges you.

On the flip side, all the money that you bring in has to be claimed as income.

Take all the money that you bring in, subtract all the money that you had to spend on your business, and that is your profit. Your profit is what you will have to pay taxes on.

Save every single receipt for business purposes for 7 years.
 

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Yep, but the bigger equipment purchases are depreciated over a period of years. Like the computer can be depreciated over 5 years. When you are making a profit the depreciation schedules can help. Just don't get caught up in the circle. Buying equipment or replacing good equipment to restart a schedule to lower your tax can get to be a bad habit. If your paying taxes, at least you know you are making a living!!! Please don't beat me up for that statement... but it is true. Isn't life cruel?
 

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I take every legit deduction (no grey areas) and claim every dollar of income. I like to sleep at night.

I want to pay a big pile of money in taxes!!
The bigger pile they get, the bigger the pile I get!!!:D

Talk to your accountant you can write off some capital expenses entirely in the year of purchase over $100,000.00

it promotes investment and helps to stimulate the economy.
Be careful if you sell it before you would have depreciated it, you will owe taxes in year of sale

Legitimately reduce your taxes as much as possible, and hope you owe a lot at the end of the year.
It means you were successful!!!
 

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my understanding is that you don't really NEED the receipt unless you're being audited. I try to charge as much as possible with business expenses so that i'll always have the proof of my caredit card statement in the event that i can't track receipts.

you have to be creative with the expenses...your internet bill, tolls, all kinds of stuff.
nope, statements are not enough, we've asked our accountant! they serve as a record that the transaction happened, but you still need a reciept because you have to have two pieces of "evidence" that what you're claiming actually happened.

the cost of the shirt isn't deductible.

the cost of your gas IS, but you definitely have to keep tabs on it like either of the ways that were already mentioned.

write off as much as you can- you do not want to claim a gain on paper for at least 5 years or so. but don't worry- that doesn't mean that you aren't making any money...its just that with what you spend and what is deductible even out or you have more deductions.

its confusing isn't it?

i love that the money you get back from deductions is taxable next year as income. WTF...talk about nickle and diming.
 

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what you pay for anything materials it takes to make your shirts are deductable..
and also any cost involved.. (like electricity etc.)

Best advice i have is keep every reciept you have.. and take them all to the accountant at the end of the year..
 

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what you pay for anything materials it takes to make your shirts are deductable..
and also any cost involved.. (like electricity etc.)

Best advice i have is keep every reciept you have.. and take them all to the accountant at the end of the year..
I agrre that is great advice.I save all receipts and let my accountant to decide. ..... JB
 

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I agrre that is great advice.I save all receipts and let my accountant to decide. ..... JB
Terrific advise. I keep a fire safe near my workstation that holds all of my receipts for the year. When I encounter an expense that receipt goes in and stays in until needed. I have always been advised that materials (tshirts / inks), printers, electricity, fuel expenses, design software, computers, heat presses, all of that is able to be written off.
 

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If it cost me $1.22 per shirt do i consider this an expense even though this is actually part of the cost that the customer pays? Which is it? Write off or not?

Also what about the gas you spend driving back and fourth to the printer?

If I spend about X gallons a week in gas JUST TO DRIVE TO AND FROM THE PRINTER how should i seperate it from regualer daily driving.

Could I say 12 miles round trip once a week to printer

12 X 52=624 miles a year X average price of gas(ex $2.25 a gallon for the year)??


624 miles X $2.25=$1,404 a year

Here is a good article I found I thought it might be helpfull to some.

Online Extra: Don't Write Off That Tax Write-Off (extended)
well if your doing just 12 miles round trip a week, that would add up to 624 miles a year but you wouldn't times that number by what a gallon of gas cost...That is unless your car or truck is getting 1 mile to the gallon...I think that would be hard to prove:)
 

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12 X 52=624 miles a year X average price of gas(ex $2.25 a gallon for the year)??


624 miles X $2.25=$1,404 a year
Stop driving that RV to the printer and back and you'll get more than 1 MPG! lol

Figure 20MPG, and your $1,404 write-off turns out to be a measly $70.20.
 

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I know this is an old post, but it's the only one I found that comes close to answering my question.

I'm hearing two conflicting things:

1: The cost of having shirts printed (by a third party vendor) can be claimed as a business expense. I took this to mean all costs involved (the actual shirts, printing costs, shipping to me etc)

2: the cost of the shirts isn't deductible

Can anyone clarify?

my scenario:

I have some money set aside from doing freelance work outside my 9-5.
Over the last few years I have claimed that income on my personal taxes and used schedule C to write off expenses like computer equip and office furniture.
I would like to start a brand. Can I lower my tax burden for the year by having some shirts printed?

I plan to form a separate company, but will likely run out of time to do that and then have the shirts printed before years end. Should I wait until the company is formed before having the shirts printed? I assume it would be cleaner from an accounting perspective.

thx
 
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