Originally posted by: Jerry Ice 33
Please don't use CPA and Kevin in the same sentence, even if it is being sarcastic. You are insulting all the legit CPAs out there....
What was your so-called profession, Jerry? Ice cream vendor?
Originally posted by: Jerry Ice 33
Please don't use CPA and Kevin in the same sentence, even if it is being sarcastic. You are insulting all the legit CPAs out there....
What was your so-called profession, Jerry? Ice cream vendor?
Originally posted by: Kevin Lewis
No...he's incorrect. If you lost the ability to take a sizable itemized deduction--because that deduction was no longer allowed--you would have lost money if that deduction amounted to more than the increase in the standard deduction.
The net gain for taking an itemized deduction or deductions was the difference between that deduction (total) and the standard deduction. You only opted to itemize if that amount was larger than the standard deduction. There are two reasons why very few people itemize now: one, because most formerly deductible expenses are no longer allowed, and two, because the standard deduction is now larger, meaning that the total of whatever itemized deductions a taxpayer has would have to be that much larger to make it make sense to itemize. It's a double whammy to itemizing.
You're incorrect about the independent contractor idea. If he elected to work as an independent contractor (assuming his former employer agreed in the first place), his tools and supplies would now have become business expenses and listed on his Schedule C rather than deductions listed on his 1040 (Schedule A). There are important differences between business expenses and personal deductions from income. I won't go into all of them here, but suffice it to say that there are many reasons why a person may not elect to become a Schedule C filer. (One would be the inability to reduce your business's income below zero for tax purposes if you had a large expense, such as...buying tools or equipment. This would be particularly hurtful if you had more than one income-producing activity.)
The point being, prior to 2018, this was an option. Trump took away that option. It's true that that option would make sense for fewer taxpayers now. But the primary reason for that isn't the increase in the standard deduction--though it is a reason--it's that so many previous common deductions, such as mortgage interest, are no longer allowed.
Didn't I say schedule C? Kevin does have a reading deficiency.
Originally posted by: Kevin Lewis
No...he's incorrect. If you lost the ability to take a sizable itemized deduction--because that deduction was no longer allowed--you would have lost money if that deduction amounted to more than the increase in the standard deduction.
The net gain for taking an itemized deduction or deductions was the difference between that deduction (total) and the standard deduction. You only opted to itemize if that amount was larger than the standard deduction. There are two reasons why very few people itemize now: one, because most formerly deductible expenses are no longer allowed, and two, because the standard deduction is now larger, meaning that the total of whatever itemized deductions a taxpayer has would have to be that much larger to make it make sense to itemize. It's a double whammy to itemizing.
You're incorrect about the independent contractor idea. If he elected to work as an independent contractor (assuming his former employer agreed in the first place), his tools and supplies would now have become business expenses and listed on his Schedule C rather than deductions listed on his 1040 (Schedule A). There are important differences between business expenses and personal deductions from income. I won't go into all of them here, but suffice it to say that there are many reasons why a person may not elect to become a Schedule C filer. (One would be the inability to reduce your business's income below zero for tax purposes if you had a large expense, such as...buying tools or equipment. This would be particularly hurtful if you had more than one income-producing activity.)
The point being, prior to 2018, this was an option. Trump took away that option. It's true that that option would make sense for fewer taxpayers now. But the primary reason for that isn't the increase in the standard deduction--though it is a reason--it's that so many previous common deductions, such as mortgage interest, are no longer allowed.
Sole proprietors ( or single member LLC's) have to file via Schedule C ( in addition to a 1040 form) to report income and deductible expenses and subsequent profit / loss from such businesses. ..at least in my experience. Is there another method / process to report this info I'm unaware of? I may have missed out on some massive deductible expense schedule all these years..even though in the end it likely may not have affected my tax liability at all.
Originally posted by: Charles Higgins
Sole proprietors ( or single member LLC's) have to file via Schedule C ( in addition to a 1040 form) to report income and deductible expenses and subsequent profit / loss from such businesses. ..at least in my experience. Is there another method / process to report this info I'm unaware of? I may have missed out on some massive deductible expense schedule all these years..even though in the end it likely may not have affected my tax liability at all.
The process changes dramatically if you decide to become an independent contractor rather than an employee, which is what Jerry was talking about when he mentioned 1099s. I assume.
However, receiving a 1099 does not in and of itself obligate you to file a Schedule C.
I assumed all independent contractors and sole proprietors used a Schedule C to report income and business expenses; both have to pay self-employment taxes ( includes Medicare and SSI taxes) and make periodic estimated tax payments throughoiut a given tax year.
Originally posted by: Charles Higgins
I assumed all independent contractors and sole proprietors used a Schedule C to report income and business expenses; both have to pay self-employment taxes ( includes Medicare and SSI taxes) and make periodic estimated tax payments throughoiut a given tax year.
All of those things are usually true, but:there are exceptions. Getting a 1099 does not automatically make you a business owner.
There's been quite a lot of controversy lately, especially during and since the pandemic, re whether a so-called "independent contractor" is in actuality an employee. Businesses large and small screwed employees over by declaring them independent contractors and thus depriving them of benefits and shifting the tax burden over to them. Nice trick.
But yeah, that's the way it usually works, as you described.
Listen to H&R Block CPA Kevin.......
Originally posted by: Jerry Ice 33
Listen to H&R Block CPA Kevin.......
I know far more than you. About pretty much everything.
Originally posted by: Kevin Lewis
I know far more than you. About pretty much everything.
Is that why you are on the LVA forum 24/7 spouting off on things every day? A bit narcissistic wouldn't you say? It seems like someone as smart you think you are, wouldn't feel the need to do that.
I know far more than you. About pretty much everything.
But yet you are found to be wrong or lying all the time.
