Don't Pay Taxes | Keep Your Money | THE HANDYMAN BUSINESS |

welcome back everybody you're watching uh the handyman business youtube channel it's a tough time of year for us small business owners guys who are self-employed it's tax time i have to go to my accountant tomorrow tomorrow at 11 a.m i'm now ready not ready i still have to get all my investment numbers ready for him plug into whatever he does all the magic that they do today's video as you can tell by the title which i haven't quite come up with yet it's about taxes and tax deductions and the importance of of taking advantage of uh corporate tax deductions unless you're very new you know that i am an s corporation prior to that i was an llc and prior to that i was just a guy with some tools and a pickup truck i've learned some lessons along the way and i wanted to share those experiences with you i'm not telling you what to do i'm just going to share what i've learned the number one thing i've learned once i got to a certain level of income profitability is get a good tax accountant all the blood in that sweat for the last 13 years it's all added up to a business where i have a lot to lose i am partnering with epson this is their rapid receipt scanner and the reason i agreed to do it is because it is very valuable to have the proper documentation for tax deductions i've got a whole long list of different tax deductions i've got a whole pile a mountain of receipts these are all hard copies from years ago i also got hard drive this is all where the new tax receipts go so first i want to just quick show you how this epson rapid receipt scanner works the setup was pretty easy it went a lot smoother than i thought i didn't have to really even type anything in i just had to download and click next next next and somehow it figured it all out and it said you're ready to go just hit computer okay and i have a one-sided receipt from the econo lodge in decatur texas so this would be a travel receipt how do we do this here just go just like this pop it in and you can see it's it's been bouncing around the truck let's see how do we do oh we hit uh hit scan boom there it is now it's on my computer in a pdf format i hit the next button i'm not going to show you because it's got all my personal intel and then i just hit save that brings me to a standard screen like if you were going to save a picture what folder do you want to save it in just hit save and that's it i just reduced my taxable income by 74.58 a lot more to go they also have this little battery operated mobile scanner i'll be keeping this in my truck from now on so that i have the proper documentation 100 if i get audited as i've been preparing for this video i've kind of been thinking what's the mindset of an irs what do they call them agents they're auditors are they agents i don't know the handyman oh we gotta go audit the handyman mr handyman irs agents here we need to audit you we need your documentation and if you are prepared with very easy to to read very easy to understand electronic documentation they do not want they do not want walmart bags full of receipts that's why i do believe that this is valuable and i'm going to be using it so thank you epson for sending this out you have taxable income and a lot of people like to brag about i made so much money i make this much money and make that much money a couple of them have went viral on my main youtube channel when you get to a certain level in business you start wanting you start wanting to say i didn't make any money i don't make any money i don't take a picture i haven't paid in five years i remember uh working for this uh this guy he has a software company and he had one two three he had about five rental houses and uh kind of picking his brain picking his brain about business in tax deductions and how much do you make or how do you what type of business are you anyways he says ah i don't make any money like what do you mean you're making money you got five houses get a brand new truck that's not my truck that's my wife's truck it's your wife's truck yeah it's my wife's truck i go well then whose car is that oh that's my wife's car look why don't you have anything there's a lot of gray area and it's like a secret society of the business world and tax accountants on how to navigate the tax code and how to categorize all your deductions and how to have it set up claiming legitimate tax deductions is an important income tax strategy for small businesses i'm just going to go through some of the main categories like i said when you get to a certain point don't rely on your interpretation hire a professional this video and these discussion points should get the ball rolling should get the wheels turning hopefully to either you're doing enough research to do it on your own which i don't suggest unless you're just starting out and you're making all 50 60 000. if you are getting above 60 000 and you can see the future 80 000 snacks a hundred thousand and and beyond that tax accountant is going to have to be a part of of your business okay i think i i think i'd stress that enough so we're going to go through the top ones that we as home service people will use as deductions first one is mileage driving mileage on your vehicle so we we drive a lot we could drive 20 000 plus miles a year hey google was 20 000 times 57 and a half cents the answer is 1.15 1.5 million hey google can you convert 1.15 million cents to dollars sorry i don't have any information you're useless their number is 11 grand eleven and a half thousand dollars so right there we just reduced our taxable income by eleven and a half thousand dollars our goal is to bring that big number down as much as possible you can't just come to the end of the year check your odometer and submit a number of course that's what most everybody does in hopes that they don't get audited and if they do get audited they're frantically creating a ledger up to where they drove that's part of documenting your mileage is you have to have a location of where you were going what you were doing for profit to drive those miles another one is supplies supplies here's an example of some supplies sandpaper coming out of my ears i get sandpaper all the time so sandpaper could be some supplies it's not an asset that i got to depreciate the next big one which i find the most complicated and that's why i have a tax professional figure this out is depreciation so when i buy something of value uh let's just take this table saw this three thousand dollar table saw i just can't just deduct it what do you mean deduct it where has to be put into a category so something of three thousand dollar value would have to be depreciated over time what about something like this my incra miter saw gauge fence quick reference angle chart deal here this is not cheap but it's not a three thousand dollar table saw do i have to depreciate this there's a lot of important things to think about now depreciating my truck i got a big deduction in what year did i buy that it was 2019. yes 2019 i purchased a new to me truck it wasn't brand new but it was pretty close to new what we did is we depreciated half of that purchase price for my 2019 taxes so last was the last year we took half of it and depreciated it so that was a big chunk of change and reducing my taxable income for 2019. in my we've got 11 500 we've got another 30 grand that's half the truck so now we've already brought our taxable income down uh 40 thousand dollars and we're just getting started the second half of that truck value is depreciated over time alright the next one up on the list is utilities your cell phone your internet even electricity one thing that i did for heating this workshop is i chose propane propane is very easy to distinguish against the natural gas and the electricity bill of my of my house so i have a propane bill and i have a receipt for it i'll probably end up going through 200 pounds a year of propane it's very easy to categorize that and show that as a business expense travel this is one that i've done quite a bit of research on because i like to travel and some of my work requires that i travel i've got more than just a handyman business and the econo lodge where the econologies go this here is an example of a travel expense what i need to do is write down on this receipt what i was doing it has the date that i had the expense it has who i paid but it doesn't have why you have to have the why part of it as well for your tax auditor or agent so how do we deduct a hawaiian vacation there's a percentage and i used to know how many what percentage of the travel had to be for business in order to take a seven day trip to hawaii you have to have a certain percentage of that time dedicated to to work or business you can get creative with that i know a lot of people will will try to find seminars or something along those lines to say that oh i went there for business but you can't go to a three-hour seminar on a seven-day hawaiian vacation what you could do is go there looking for real estate and go to an open house on five of the seven days go to the open house get the flyer and go back to the beach now is that stretching it if you don't have anything uh in your business that shows that you are a real estate investor then it's probably not gonna fly but if you already have three four rental houses maybe only one rental house i think it would pass but would the the agent the irs guy would it pass with him i'm not sure that's why you should ask your tax account there's other requirements for having travel as a tax deduction it has to be away from where you do business like on a day-to-day business so if you live in dallas texas uh you can't go to fort worth on a business trip but you could go to say houston on a business trip now this is another one that i like advertising advertising is a huge portion of most corporations most businesses budget you can fully deduct all your advertising expenses uh it doesn't matter if it's a business card uh ads on facebook or a monster truck yes you can go out and buy a monster truck and have the handyman plastered across the side of it as you're advertising you could have a link to your website you can have a link to your instagram your facebook your twitter snapchat your only fans probably have to cut that one out another one is home office this here isn't my office this is my we'll call this we call this whatever you want calls my laboratory my workshop my film studio but anything that goes in here is a deduction anything that goes into my home office is a is a deduction along with your home office you have office expenses whether it's magazine subscriptions you know you go to an office and they've got magazines out there or you have a fish tank or you have lots of taxidermy a lot of offices have taxidermies my story i'm sticking to it this one's pretty straightforward rental equipment you go to the home depot refinish hardwood floors i go and rent the big drum sanders and the big buffers those are tax deductions another one it's a miscellaneous category maybe this fits into my miscellaneous category if you've got deductions you got business expenses that don't neatly fit into other categories they can fall into the miscellaneous category the irs has all these definitions and these these these words ordinary and necessary is it ordinary for your business to need this thing and is it necessary for your business to need this thing can actually kind of feel better talking about this because i have high anxiety levels going in tomorrow and i still have a lot of work to do gathering numbers to reduce my taxable income i've got thousands and thousands of lowe's and home depot receipts and will this epson rapid receipts okay goes in like uh goes in upside down will this thing take a flimsy wrinkled up lowe's receipt and scan it how'd it come out perfect takes a perfect scan of course i'm not going to show you all my d my personal details you're going to have to take my word for it that there's a perfect pdf copy of this old wrinkled up receipt from what's the date on this one 2014 uh the total amount and what what it's for self-discipline is what it takes or else you're gonna end up in jail or something like that or you're gonna end up having to pay the irs all the money in your your kids college savings account if you got any questions put them down below and more importantly if you have advice or personal experience yeah let's go with personal experience not something that you read not something that you heard on another youtube channel personal experience put it down below in business tax deductions business expenses that are legitimate because we don't want to go too far over the line there's no doubt that there's a big gray area and you want to stay in the safe safer region even if it costs you a little bit of extra money that's all goodbye

Channel: The Handyman Business

Views: 69,359

Rating: 4.9289389 out of 5

Keywords: taxes, 2020 taxes, 2021 taxes, self employed, small business, entrepreneur, entrepreneurship, self employment tax, tax accountant, tax deductions, tax writeoffs, tax write offs, business expense, travel expense, home office, irs, irs audit, audit

Id: 4p_4jBcCQWo

Length: 14min 54sec (894 seconds)

Published: Wed Apr 07 2021