[caprig]

Hello all, not sure if this is the correct place for this question, but my husband recently started his own painting business after working professionally in painting for 28 years. (he is going to join this forum next week when he gets the time)

And yes, he is a professional, and I am in this with him.

He is new at bookkeeping for this(as am I), and wants to know if you can deduct ladders, sprayer, and other tools or not (ran into some time sensitive things we need to file so that is why I am asking and not him as he is slow at typing on the computer).

He learned that you are not allowed to deduct painting clothes so he wants to be sure that he does this correctly.

Also, it is just him (meaning no non-family employees at the moment), what kind of bookkeeping software is simple and not expensive that we can start out with- or excel spreadsheets that can be easily adapted to painting?

So many of these things are made for other types of businesses and are WAY over complicated for the records that need to be kept.

Thanks!:thumbup:

 

[Brian]

All equipment and tools are deductible. The time frame will be determined by the useful life of the particular item. For example, if a spray rig costs $1K and has a useful life of 5 years, you would deduct the cost over a 5 year period.

I won't claim to know the details on the deduction--that is why I have an accountant.

I recommend Quick Books for accounting software. Certainly you can use Excel, but QB will prove worth the cost over the years. You will have historical data that is easy to use and very informative. This will be much more difficult with Excel.

I realize that QB is a little pricey. But just as you need to invest in ladders and spray rigs, you need to invest in the proper tools on the business side of things. And QB is one of the best investments.

Brian Phillips

 

[straight_lines]

You need to find a decent accountant, and go over all those things with them. I know starting out you want to save as much as possible, but this is one area where you have to recognize you are over your head.

I do exactly what mine tells me to in terms of paperwork using software they suggested, and things work out great. They can also help with lots of other things like setting up your business and salaries for you and your husband.

 

[caprig]

All equipment and tools are deductible. The time frame will be determined by the useful life of the particular item. For example, if a spray rig costs $1K and has a useful life of 5 years, you would deduct the cost over a 5 year period.

I won't claim to know the details on the deduction--that is why I have an accountant.

I recommend Quick Books for accounting software. Certainly you can use Excel, but QB will prove worth the cost over the years. You will have historical data that is easy to use and very informative. This will be much more difficult with Excel.

I realize that QB is a little pricey. But just as you need to invest in ladders and spray rigs, you need to invest in the proper tools on the business side of things. And QB is one of the best investments.

Brian Phillips

Thanks, Brian for the input. It is always overwhelming to start in anything new like this and it helps to have all the input we can get! :thumbup:

 

[caprig]

You need to find a decent accountant, and go over all those things with them. I know starting out you want to save as much as possible, but this is one area where you have to recognize you are over your head.
I do exactly what mine tells me to in terms of paperwork using software they suggested, and things work out great. They can also help with lots of other things like setting up your business and salaries for you and your husband.

Thanks SL! At this point there won't be an accountant possible, but it will be a consideration for the future. We have several friends locally who have been through a lot of awful things from accountants who messed up so we are not anxious to get hooked up with one at the moment, nor is it possible.

Once I have time, I will be able to study this through and learn more about this to help him- I did take significant amounts of bookkeeping and accounting in college, but it has been a while so I need to have time to study this through in this venue. Knowing what software is good helps to start out with, but I am just getting input for now.

Unfortunately, we have had some unexpected things happen to us this year which have put a damper on everything we would like to do, So we have to pinch hit until we can settle into this whole thing.

Thanks so much for taking the time to respond. It is really nice of you to take the time, and I appreciate it and will keep it all in mind.

 

[RCP]

Welcome to the forum caprig, the guys gave you some great advice, some of the decisions you make now will have an impact on your business for years to come.
Finding an accountant or Quickbooks advisor to help you set things up properly will save you tons of frustration, believe me! Some areas even have business centers that offer help, or groups like SCORE.

We look forward to you and your husband's input here, feel free to post an intro here

 

[Workaholic]

I agree with those that suggested QB and the accountant. Taking on your own accounting can be filled with many hazards. Not that it can not be done but I prefer to let the professionals handle it.

 

[capitalcity painting]

Honestly it seems that every painter in my area that has ever been audited and had to pay huge amounts in back taxes and fees had an accountant when it happened. I have sat down with 2 accountants to try and let them take care of my stuff and have left thinking there was no way in hell because they didnt know of some of the basic stuff that I knew to be fact. These were accountants that came recommended from other contractors and had nice offices. Not saying they are all like that just my 2 cents on my experiences.

 

[Workaholic]

Honestly it seems that every painter in my area that has ever been audited and had to pay huge amounts in back taxes and fees had an accountant when it happened. I have sat down with 2 accountants to try and let them take care of my stuff and have left thinking there was no way in hell because they didnt know of some of the basic stuff that I knew to be fact. These were accountants that came recommended from other contractors and had nice offices. Not saying they are all like that just my 2 cents on my experiences.

This is true that there are some bad ones out there, sadly you probably will not know how bad they are until it is to late and you are having legal problems.

Of course we have all had HO's that thought they knew more than we did on their painting projects as well. I think all professionals experience this in some form or another.

 

[aaron61]

maybe you should try an accountant lead service.

The accountant bashing kinda sounds like how HO's talk about contractors....HHHMMMMMMM

 

[straight_lines]

Honestly it seems that every painter in my area that has ever been audited and had to pay huge amounts in back taxes and fees had an accountant when it happened. I have sat down with 2 accountants to try and let them take care of my stuff and have left thinking there was no way in hell because they didnt know of some of the basic stuff that I knew to be fact. These were accountants that came recommended from other contractors and had nice offices. Not saying they are all like that just my 2 cents on my experiences.

You have to find a good one agreed. I have one that is amazing, and any time I have a question they are there. He also is very conservative in terms of my deductions and if I was ever audited I wouldn't be worried.

As far as cost it isn't as much as you would think caprig, and you really are about to find out how much work that really is.

 

[RCP]

maybe you should try an accountant lead service.

The accountant bashing kinda sounds like how HO's talk about contractors....HHHMMMMMMM

LOL, can you imagine three accountants giving estimates and lowballing each other!


Caprig, you might also want to join Brian's workshops, here.

 

[Workaholic]

The accountant bashing kinda sounds like how HO's talk about contractors....HHHMMMMMMM

That is kind of what I was hinting at.

 

[ProWallGuy]

He learned that you are not allowed to deduct painting clothes so he wants to be sure that he does this correctly.

Really? I deduct all my work clothes. They are classified as uniforms.

 

[capitalcity painting]

I agree that they are well worth the money. I was actually surprised how cheap they were. Just havent found one that I am comfortable with yet. I think that alot of them try to be too slick and save you too much money in order to look good and keep your business but in reality when it comes down to whether its right or not the IRS will be on your butt not theirs.

Maybe I should ask you all the question that the accountant seemed to not know. Every time I do my taxes they want to know how many miles you put on your vehicle unless you have less then 4 vehicles then you can just claim the standard deduction and not have to keep an accurate log. Maybe I am wrong, but I just claim the standard and dont worry about the log as I only have the one work vehicle.

 

[straight_lines]

I do fuel, and not mileage, works out about the same for me and I use a gas card so its only one thing to keep up with.

 

[LeogeN]

Honestly it seems that every painter in my area that has ever been audited and had to pay huge amounts in back taxes and fees had an accountant when it happened. I have sat down with 2 accountants to try and let them take care of my stuff and have left thinking there was no way in hell because they didnt know of some of the basic stuff that I knew to be fact. These were accountants that came recommended from other contractors and had nice offices. Not saying they are all like that just my 2 cents on my experiences.

Unfortunately the term "Accountant" is not a designation. Anyone can call themselves accountants. This is where people will run into trouble.

You also get what you pay for.
----
Hire a real accountant with a designation, in Canada (CMA, CGA or CA). Get them to set up your accounting software the right way, (ie: Quickbooks, Simply Accounting etc. just like someone mentioned above).

You will only be looking at a 2 hour session, probably cost you $75/hr, but will save you a lot of money in the future. ie: Missed out on potential tax deductions, Income tax payable problems, Sales tax etc etc.

 

[caprig]

Really? I deduct all my work clothes. They are classified as uniforms.

That is what we thought, but we found out from a business tax resource that painting uniforms specifically are not allowed to be deducted because they are considered street wear- isn't that stupid?

I can not find the book right now that we also found it documented in, but when I do, I will post the name and page number so you can see it for yourself and tell me what you think.

 

[caprig]

Honestly it seems that every painter in my area that has ever been audited and had to pay huge amounts in back taxes and fees had an accountant when it happened. I have sat down with 2 accountants to try and let them take care of my stuff and have left thinking there was no way in hell because they didnt know of some of the basic stuff that I knew to be fact. These were accountants that came recommended from other contractors and had nice offices. Not saying they are all like that just my 2 cents on my experiences.

This is EXACTLY what we have found in our area as well. There have been many problems with a LOT of accountants that painters use in the area- and other businesses as well. Once we get into the swing of things, I am sure we will be okay with doing it, it is just a matter of finding the right way to do it.

I was very good at accounting in college, so I am sure between the two of us we can handle it for now until the business grows larger, anyway.

 

[Vipervgts]

deductions

I deduct everything, Meals entertainment, Home Office, Internet & Telephone for the home office. My accountant said if your home office takes up 25% of your house then it can pay 25% of the expenses. Electricity, taxes, or charge your home office rent. $300 to $500 a month. I rather it just pay some of the bills. All repairs on the cars, trucks, vans, gas, parking expenses, tolls.

Where do you live?

Do you plan to file your own taxes? Or will you use an accountant for that?