Mrs. CPA

Stress for sale! Bargain Basement Prices! All Credit Applications Accepted!

Where did this week go? It’s Thursday? I didn’t mean to run off!

Anyone who has been reading here over the last few months knows what crappy luck my family has been having lately in regards to health matters. Let me recap for you:

August – humongously pregnant,  HOT, working ridiculous hours to get as much work done as possible to not leave my coworkers in a lurch so that I can have a baby.

September – Have a baby. (Hospital #1)

October – Adjust to having two children (not too hard) and be F-A-T from all the brownies I ate while gestating (not doing as well on this front [or back for that matter]).

November – Try and post every day even in the midst of my son getting a life threatening staph infection and staying in the hospital for 5 days and then having to stay home with him for a week and not getting paid for any of that time off. (Hospital #2)

December – Holiday craziness coupled with my daughter being admitted to the hospital for RSV and pneumonia on Christmas Day and staying for two days. And not getting paid for any of that time off either. (Hospital #3)

January – Close processes had me working until 6-8 every night, a few nights even later, Saturday work and one Friday all night until Saturday at 10:45. On top of that, now my Dad is in the hospital with a bleeding ulcer. (Hospital #4)

 Maddie is getting baptized this weekend, I have 25 people eating lunch at my house after that, and Dad was going to make the hamburgers.  Plus, MY HAIR IS FALLING OUT. I cannot stand unattached hair. Mine is everywhere. It’s because my pregnancy hormones are completely gone, but I’m ready for this part to be over.

We do this health and wellness thing here at the office and I had my screening where they do the blood pressure and cholesterol and glucose readings. Last year I was about 5 weeks pregnant and everything looked great. I was also VERY flexible.

This time – not so great. They do a follow up call with you to discuss your results. The person who called me asked about stress.  And I laughed out loud - possibly scaring all my coworkers. Stress? Like your kids being in the hospital, having no vacation time, needing to buy Christmas presents,  getting in huge fights with your Mom,  not seeing your kids for any meaningful amount of time and falling into bed exhausted as soon as you can? That kinds of stress? Why yes! I have stress. More than enough, enough for several people!

She asked when all of this craziness would be over, and I told her the close process was done and that both kids seemed to be reasonably healthy and I’m going to a GREAT girl’s conference next weekend, and yeah, I’ll be on easy street after the baptism is over this weekend…

BOOM! My Dad calls and can barely talk because he can’t breathe. He’s lost so much blood that what he has left  can’t carry enough oxygen to his lungs FOR HIM TO SPEAK. That’ll stop you in your tracks. So I spent the day at the hospital. Holding his hand and making sure his blankets were pulled up because he was shivering since he didn’t have enough blood circulating to keep him warm.

He’s going to be fine, but the doctor told him that besides the bleeding ulcer, he has three or four more places that are going to be ulcers soon and if he doesn’t stop taking 3 BC powders a day, he’s going to be in big trouble.  His blood pressure was down to 85/43 today. That is almost dead. 85/43. That sounds like a cat’s blood pressure or a test score or something.

Anyway, he’s going to be in there for a few more days and he’s going to continue to be grouchy about it. Because, hello? They stopped letting you smoke in hospitals in like 1975. And even though this hospital is practically pre WWII era in some parts, I think the no smoking ban has been grandfathered in.

Maddie has been waking up at 2am coughing and not being able to stop and go back to sleep. So I’ve been getting up with her and sleeping in the chair or on the couch. I’ve started sucking out her nose at 3am, which, I’m sure you know, is totally fun for all parties involved.

So what I’m saying is: STRESS: I HAZ IT. But I hope it will get better. And I’m keeping my sense of humor about things, by doing zany, off the wall things – like buy clothes from J.Jill and hope like hell they fit, and I still get these grand plans for 100 days of school t shirts that end up cracking our countertop.

Blisstini’s here I come (hopefully in something cute that fits that no one will laugh at me behind my back for and also, will inspire people to want to eat dinner with me)(I am not above bribery with magnets since I won’t have Maddie with me.)(And if Jen Lancaster, Redneck Mommy, and Her Bad Mother were all at a conference together, who would you try and shove a magnet in the hand of first accost first hug in a very non stalkerish way say hello to first?)

I am the Awesomest Mom in the History of Awesome Moms

Friday is Hudson's 100th day of school. The day care asked that we make a shirt with 100 things on it. After much hemming and hawing about it I came up with the best idea EVER. (And if you know someone else who's done this that I probably saw and then subconsciously copied, don't tell me)(Don't.)(Let me keep thinking I'm awesome.)

(Face Eaten off effect was totally Tim's fault.)(He ironed on the counter top and put a big crack down the middle of it.)(His idea.)

This, my friends, is Hudson's head, lovingly cropped out of 100 pictures, painstakingly applied to that stupid online Avery program, printed out on stretchable iron on transfer paper and then hand positioned for maximum effectiveness. All before midnight. I WIN DAMMIT.

Obama-Oshama I Got Magnets Ya'll

Coming to a refrigerator near you!

 I'm bringing them to Blissdom to give away, and if I send you something in the mail, you'll probably get one too. Along with my business card.

And I made myself one of these to carry it all around in:

You want me to make you one? I can. And I'm cheap labor. I made Mrs. 007 some awesome business cards.

True Mom Confession:

My baby had a mullet:

 

And I hated it so I cut it off:

And I'm not the least bit sorry.

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Thanks to everyone who entered my giveaway last week and stopped by my review blog. I'll be giving away more stuff in the next few weeks, I hope you'll keep checking in.

Also, my labor of love, the blogging and taxes series, was pretty successful. Thanks for sticking around while I let my geeky CPA side shine through. When it gets closer to tax time, if anyone thinks of any more questions or is having a freakout over what to do, I'm happy to help!

Blogging and Taxes - Part 3

(This is third in a series of articles about blogging and taxes. Part one is here. Part two is here.)

What did I tell you we were going to talk about today? My brain is a little fried from work these days.  Oh, yes. dun duh dunnnnnnnnnnn - the.....

BUSINESS DEDUCTION

This is the big one, what everybody wants to know about. "I know I've got income but what can I use to reduce that income?"  The IRS says that  you can take any reasonable expense that is ordinary and necessary in order to run your business. Since you're in the business of taking over the internet, that gives you some idea as to where to start.

This is a good starting point (it's bullet time!)

• hosting fees
• a percentage of your internet connection costs that are attributable to business use
• mailing expenses for prizes
• cost of your website design
• office supplies used for business
• travel (which includes travel by air or by car to conferences)
• conference fees
• equipment like computers and printers and servers for your business and depreciation on that equipment
• gifts that you purchase to give a way - these are limited to $25 per person per year
• Legal & accounting services
• Advertising you do on other blogs
• professional organization dues
• Babysitting services (if your spouse works) can be eligible for the childcare credit

If you purchase any of these items on your credit card, they are deductible when they are charged, not when you actually pay for them.

These things are not deductible:

• Fines
• Penalties
• Kickback
• Bribes
• any amounts paid or incurred in dealing controlled substances

Wait, those probably don't apply to you. If they do, you run in very cutthroat mommy blogger circles.

No matter what that person at the walk in walk out with a refund loan place says, normal business type work clothes do not count as a uniform. So those cute Old Navy pajama pants? NOT DEDUCTIBLE. Only if you have an actual uniform that you pay for and is required by your employer. Steel Toe boots deductible. Bunny slippers - not deductible.

If you can make an argument that an expense is necessary for you to conduct and grow your business, the IRS says try us.

A HOBBY LOSS CAN STOP ALL THIS DEDUCTING IN ITS TRACKS

If you consistently have a loss on your Schedule C, the IRS can start disallowing that loss unless you have income in three of the last five years. So deductions are good to a point, but if you think you're going to consistently reduce your tax liability by deducting the two cases of diet cokes you drank this week as an office supply, you're out of luck. The IRS isn't going to let you do it. Once you don't meet the test for a business anymore, you have to start reporting your losses as a hobby loss.

I know what you're thinking hobby=good=holly hobby=hobby horse=hobby like knitting=hobby like interneting, right? Wrong. The IRS treats hobbies like they don't even exist, that is, until you start making money again. (of course they do.)

Hobby losses are only deductible to the extent of income produced. The are subject to the 2% floor on miscellaneous Itemized deductions. That means if you make $500,  you can only take expenses of $500. Not so fast though, you have to take you regular income, multiply it by 2%. Take only $500 of expenses and if the $500 is OVER the 2% number you calculated, you get to take a deduction for the portion that is over the 2%. Basically you get gypped. And if you don't itemize, you don't get anything for a deduction. So don't try throwing in the kitchen sick when you're figuring your deductions. The IRS will start cutting you off from the refund gravy train after about 3 years.

So does that clear up your business expenses questions?

WHAT KIND OF FORMS MIGHT I NEED?

Form 1040

Schedule A

Schedule C

Schedule SE

Form 8829

Form 1065 for an LLC and

Form K-1

OTHER STUFF YOU NEED TO KNOW

If you are making significant money, or will have income reported to you from your LLC on a K-1, you may need to make estimated tax payments. These will keep you from getting an underpayment penalty and from having a heart attack when you see what kind of tax you owe.

If you are selling things, you may beliabile for collecting and remitting sales taxes in your jurisdiction for sales in that jurisdiction. There's also the issue of Use taxes for items you purchased that no sales tax was charged to you on. In most states you are required to report these purchases and pay your home city, county and state sales tax on those purchases. Compliance to these rules are EXTREMELY LOW as I'm sure you can imagine. But It's the law. If those zappos shoes are worth and some extra money in penalties and interest to you if you get caught, then it's up to you.

If you are a single member LLC, there's not a federal filing requirement but each state has different rules and may have a franchise tax that is due on an entity level basis. They will revoke your charter if you don't file and pay these type things and it's best to just do it and get it over with.

Hit me with your best shot! you got any questions?

I hope this has been helpful. Ya'll stay out of trouble with the IRS, now,  you hear?

Don't forget about my giveaway. It's open until Friday and is a great deal for anyone with allergies.

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I do work like this and more for a internet based businesses, and I can help you!

DISCLAIMER: Any tax advice was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

Blogging and Taxes - Part Two

(This is the second in a series of articles about blogging and taxes. Part one is here.)

Yesterday we talked about whether you needed to establish yourself as an LLC, how to go about doing that and other "starting out" business considerations. Today I'm going to tell you about what constitutes business income and what to do when people start talking about a home office deduction.

WHAT AM I SUPPOSED TO REPORT AS INCOME?

If you sell advertising space on your blog and make over $600 per advertiser, the advertiser is required to send you a 1099 reporting the amount that was paid to you for advertising space. By providing you with a 1009-MISC they are also REPORTING YOUR INCOME TO THE IRS. One of the easiest ways to generate a notice for yourself is to fail to make your return match documents that the IRS checks against your return and social security number to . This includes W-2's, K-1's, and 1099's of any kind. The IRS has a document matching program that is pretty serious about making sure all income reported to them by a third party is reported by you on your return.

Even if you don’t receive a 1099-Misc from an advertiser, you are still required to report that income on your return. If you don’t have any expenses (and I bet you do, we’ll talk about what those are tomorrow) the income gets reported on Line 21 of your 1040 as other income. If the aggregate is greater than $400, you will owe self employment tax, which is 15.3% of your earnings. You get a deduction on page two for half of that self employment tax. Self Employment tax is the Social Security and Medicare taxes that would be taken out of your paycheck were you employed by someone else. If you were receiving a W-2, you would see 7.65% in total for Social Security and Medicare, and your employer would be required to deposit the other 7.65%. But, if you are self employed, YOU are the employer and must pay in both halves of the tax.

I KEEP HEARING ABOUT A HOME OFFICE DEDUCTION, SIGN ME UP FOR THAT!

Well, not so fast. Do you rent an apartment or a house? Then this might be a better option for you than if you are a home owner. The rule is that your home office must be used exclusively for business. This doesn’t mean you can deduct the square footage of your kitchen table or your couch. If you use our office for personal use at all, it is not deductible space.

The reason why you don't want to use the deduction if you own your home is simply record keeping. The deduction is not ever going to be a large amount. When you sell your home, you have to do some more complicated calculations for recognizing gain on the portion of your home you used for business. It can get messy. Since the IRS allows a married filing jointly couple an exemption on the gain on the sale of a home up to $500,000, anything that makes you add back income is probably not a good idea.

The old way around this was to not take depreciation when figuring your home office deduction. Everyone thought they would be smart by not taking the deduction and then there would be no reason to make an adjustment to the basis when the house was sold.  The IRS caught on to this trick and decided that they didn’t care what you had done, the basis still needed to be reduced.  So there's no advantage to not taking the depreciation.

If you do decide to take the home office deduction, it cannot be used to reduce your business income below zero. There are several things you need to keep up with if you qualify and want to take the home office deduction.  You will need the full square footage of your home, the square footage you use for business. You need to keep up with the basis in your home - the purchase price and any capitalizeable items that have been purchased increase your basis. You also need all of your bills for your house, mortgage statement with interest, insurance and property taxes, electricity, gas, water, whatever your utilities happen to be. You have to break out the value of the land your house sits on (land is not a depreciable asset). This information is all put on Form 8829 and either carried to Schedule C or to your Schedule A as a miscellaneous itemized deduction subject to the 2% limitation.

See how complicated this can get? Most people's offices take up less than 10% of their house and the deduction won’t be all that much. Certainly not enough to fool with interest expense and calculating the value of your land and the basis in your home and how many trips to Lowe's you made this year. 

If you rent, most of this headache goes away. As long as you use the space exclusively for business, you need to keep up with your expenses and the square footage of the office and you’re ready to go! You still report the information on From 8829 and it flows to either  your Schedule C or Schedule A. 

Thursday, I'll talk about deductible business expenses and where to report all this.  And Friday, I'll answer any questions you might have, just leave them in the comments or e-mail me.

Don't forget about my giveaway. It's open until Friday and is a great deal for anyone with allergies.

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I do work like this and more for a internet based businesses, and I can help you!

DISCLAIMER: Any tax advice was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

Blogging and Taxes - Part 1

This is the first in a series of articles about blogging and taxes So you have a blog, and you're making some money. What do you do now?

BUSINESS FORMATION

 If you want to keep it simple, give your advertisers your name and social security number for reporting purposes and they will send you a 1099 (if your earnings are over $600 per year). If your earnings don't meet the threshold for receiving a 1099, you are still required to report the income you received from the advertisers. You can do this on Schedule C as a sole proprietor, or if you don't have any expenses associated with the income, on line 21 of your 1040.

In certain circumstances, you might want to form an LLC. This is a simple form of organized business. If you are the sole owner, there is no additional tax filing paperwork required, it is reported on your 1040, on Schedule C. If there is more than one owner, there is a filing requirement of Form 1065, which is due April 15. The 1065 will produce a K-1 that is reported on your personal income tax return. There are other structures of business, corporations or S-corps, but for most internet entrepreneurs, an LLC offers the protection you need with a simple structure. The LLC generally pays no tax of it’s own, all the income and expenses flow through to the owners and the income is subject to Self Employment tax.

YOU THINK YOU WANT AN LLC, WHAT DO YOU DO? 

One of the first steps in the LLC process is picking a name. You want to do this wisely. It is not impossible to change your name after the fact, but it isn’t easy. Most states require that you include "LLC" in your name if you are a LLC. The Secretary of State’s website can be a resource for choosing your name. Normally they have a searchable database of names recorded, and you can’t duplicate. It doesn’t have to be the name of your website either. It can be Yourlastname Media, LLC or yourdogsname, LLC if you want. As long as the name is not misleading or offensive, the state will probably ok it. But don’t get your heart set on something before you check to make sure someone else hasn’t had that brilliant idea before you.

Each state has it’s own filing requirements for setting up an LLC. You can normally find these requirements on the Secretary of State’s website for each state. There may also be initial filings required once your business is set up. Your state’s website for the Department of Revenue can also be helpful. Most of them have a “new business” section with helpful information and links. Once you set up your LLC, the state generally sends you some confirmation paperwork. This will have the date the state recognizes you as an entity. This will be important for your tax filings. DON'T LOOSE THIS PAPER.

An LLC will offer you protection under the law if there is ever a lawsuit filed against your company. If you have been keeping your business and personal items separate, the courts will generally only look to the assets of the LLC to fund a settlement rather than trying to take your house, your car, your kid’s college fund, all your investments, and your cat to pay off the person suing you if they happen to win.

The way to insure that the courts don't look to you personally to satisfy a judgment is to keep ALL YOUR BUSINESS ACTIVITY SEPARATE FROM YOUR PERSONAL ACCOUNTS. Don't pay your kids preschool tuition directly out of your LLC account. Don't pay for your groceries with the paypal debit card directly linked to your LLC account. If you want to use money from your LLC money, transfer it to your personal account, then pay for whatever you need to pay for. If you keep it separate in the day to day business, the courts will be more likely to keep it separate in the event of a lawsuit. It shows the court that you are treating the business as a business, not as an extension of your personal checking account. It sounds like a record keeping nightmare, but think about how relieved you will be when a judge throws out any personal claims against you and your assets.

WHAT DO I HAVE TO TELL THE IRS?

In conjunction with filing for your LLC status, you should also apply for a Federal Identification Number, it's a social security number for your business. You can do this electronically on the IRS website. They have recently changed the process so you answer a series of questions instead of filling out a blank form. Once you have completed the questions, you are provided with your number instantly. That is the number you want to give to your advertisers to report your earnings under. This number will be used to identify your business with the state and federal government. Like your LLC paperwork, it’s important to keep up with this number.

A lawyer or accountant can help you with all of these steps. If you decide that you want to do more than create an LLC, you definitely need the advice of  a lawyer or accountant as there are more stringent reporting requirements and the initial filings are more complicated.

Wednesday, I'll talk about business income and the home office deduction. Thursday, I'll talk about deductible business expenses and where to report all this. And Friday, I’ll answer any questions you might have, just leave them in the comments or e-mail me.

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I do work like this and more for a internet based businesses, and I can help you!

 DISCLAIMER: Any tax advice was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions

No one can say they aren't related

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Have you been over to my review blog? I'm giving away an allergy protector for your mattress and pillow.

That would be my office computer

you see in this picture. I am still here from FRIDAY. And that is AM.

UPDATED: I finally got home at 10:45am. I was awake from 5:15 am Friday until 12:30 pm Saturday. That's just wrong.

Sunrise

I get up and leave so early in the morning the sky is just starting to color in the east. After I back down my driveway and put the Mom Mobile in drive, this is what I see (on the few and far between days lately that it hasn't been raining ice). I'm no photograper, this is a snapshot from my flip video, but every morning, that beautiful sky gives me hope about the new day and what it's going to bring.

Unfortunatley, 60 minutes later after I've gone to pick up Kaden and he's whined the whole way to school, Hudson has dropped his cereal, won't give up his "sassy", they both have complained about what DVD they are being FORCED to endure on the ride to school, and I've fought the traffic back to work, this scene is all but forgotten.

Until tomorrow.