I make a lot of money in cash- how can I best legitimize it as to not get in trouble with the IRS and also not pay a ton of tax?

IRS business expense categories list

Anonymousu2019s answer is goodu2026 but let me put you at rest.

,Many people make money u201call cashu201d u2014 itu2019s not that unusual.

To make it legitimate, well, it is legitimate, since you are earning it lawfully.

You donu2019t need to u201cstartu201d a businessu2026 you already have one! So the issue is not one of having to come out from the shadows or somehow make what you are doing legalu2026 itu2019s already OK.

,What you do have to do is do the things that a good business owner should always do.

That includes these things:,Keep a record of who pays you and for what.

A simple log book or even a calendar would do.

,You should open an account which is only used for the business.

It does not have to be a business account per se.

Just a separate account.

Banks will try to sell you some expensive business account.

No thank you.

A free personal checking account will do just fine.

,Deposit all the cash you receive, intact, on a daily basis.

Donu2019t take some of it for personal use, or pay expenses with it.

Doing that will show a clear trail from your revenue record ( # 1) to the bank.

,Get a debit card or a credit card (preferred) and pay business expenses with it.

Donu2019t use it for personal expenses! Donu2019t pay for business expenses with cash, because itu2019s hard to track.

,For every business expense, get a receipt or invoice.

Have a folder for each month.

On one side of the folder, put your revenue log.

On the other side, put a list of your expenses.

Have an envelope inside the folder with all the receipts.

,Track your travel expense on business related trips, such as going to the store to buy supplies, going to the bank to make deposits, etc.

So, if you drive keep track of the miles driven for business, or your bus fare or subway fare if you use those modes of transport.

,At least once a quarter, summarize your income, and expenses by category ( in other words, prepare a Profit & Loss or Income Statement)u2026 you will need this to figure out your taxes.

,You do NOT need to buy a computer, you do NOT need to pay for an expensive bookkeeping program, you do NOT need QuickBooks.

Use the KISS system- u201ckeep it systematized and simple.

u201d,You must pay estimated income taxes.

They are due quarterly, on April 15, June 15, September 15 and January 15.

For two quarters ( June and September) the estimates are due before the end of the quarteru2026 go figure.

.

(but they are u201cestimatesu201d only ) Generally, for small businesses, you can figure on somewhere between 25 - 30% of your net profit is due the government.

That sounds outrageous, but you have to pay social security (self employment) taxes which are about 15%, and then federal income tax starts at about 10%.

You also owe State and City taxes.

So depending on where you are on the income ladder, you owe at least a quarter of what you make.

I know, this sounds crushing, but thatu2019s the reality of taxation.

Just figure that you have a partner in the business, a silent, somewhat greedy one.

,You have some expenses you may not have thought of u2014 things like an office in the home, etc.

Because each business is a bit different, income tax rules are complex and confusing and ever changing, you should get a good CPA or EA to help you.

I cannot over-stress the importance of consulting with a good accountant.

They can save you many times their cost.

You need to find one who likes small business clients.

Unfortunately, many CPAs and EAu2019s are more interested in chasing after high dollar clients than helping small business owners.

Find someone who values you as a person and a client.

Small business expenses list

A2A.

Sales and marketing - specifically an automated lead generation and marketing tool.

Thats on top of my current wish list.

Business expenses list PDF

Actually, the best way to purchase a new bimmer is through the European Delivery method (ED).

Ive done it twice, and saved $17K on my first 330Ci, and about $12K on my 2nd E90 330i.

So sure, you need to fly up to Munich to pick up your new baby, but thats a GOOD THING.

If youre flying out to Munich just to pick up your car, subtract the price of the flight + 1 night hotel stay, and youll still come up way on top.

If you can make a trip out of it, then actually driving your own car will help you negate the costs of a rental.

,You need to check out www.

e90post.

com for the latest secret price list PDF.

Here is how it works, in a 10 thousand foot level:,1) Find the secret price ED PDF.

If you just google it, youll find it.

There is a PDF for the 3, 5 and 7.

You cant do this on the X and the Z cars, because theyre made in the US.

You may be able to do this on M cars, but usually, the program is offered on non-M cars,2) In the PDF, youll find the European Invoice price.

Usually, this is 5% below US INVOICE.

So even if you cant find the PDF in 30 seconds, just go to KBB.

com, find the invoice price on your desired car, and subtract 5%.

Thats your European Invoice.

,3) Add all the options, at the INVOICE price (US invoice),4) add destination, and CA tax or whatever state tax you live in,5) add $500-$1000 profit to the dealer.

Ive done it twice with just $500 profit to the dealer.

He made much more than just $500 on me because he didnt really get the car for the invoice price.

,6) once you have the price, compare that price to MSRP on the car + MSRP on al the options, which is how much you would pay if you didnt do ED.

Obviously, the more car you buy, with more options, the bigger the delta is between the ED price and the US MSRP price.

For example, you would save as little as $5K on the cheapest car, stripped, and you would save as much as $50K on the most expensive 7 series.

,7) Now that you have your price, figure out, again by doing research on Google, which dealers around you are known to give out fair prices on the ED program.

In my case, twice, I gave dealers in the bay area (CA) a chance to get my business, and they didnt bite.

So I ended up with an amazing dealer in San Diego.

,Thats it.

Once you find the dealer, youll place an order for your custom BMW, and 30 days from the day of manufacturing, youll need to start making payments, or pay for the car.

Then, youll get a date and a time, and youll need to show up in Munich, to pick up your new baby.

,The delivery experience is AMAZING !!! Youll get to see BMW World, and if youre lucky, and they have slots, youll get a factory tour (book early, because these sell out quickly).

Tax deductible expenses list

Only legit medical expenses that are not reimbursed by your insurance, and exceed 7.

5% of your income, are deductible.

List of monthly expenses for small business

If you run a business, I am sure that you need to deal with thousands of documents.

Dealing with thousands of documents and signing on those manually, keep tracking signed and non-signed documents, collecting signatures from various parties u2013 I know these are very hazardous.

E-signature programs can solve your all problems.

,Here are my lists of best e-signature apps for business uses:,Best Program: Signaturely - Very effective and easy signature processFrom my personal perspective, Signaturely ranks first because of its comprehensive services regarding e-signature service.

,Its comprehensive services regarding e-signature free you from hazard maintenance.

,You can type, draw, or upload your signature using this program.

Also, team collaboration service makes your office management easier as your team can virtually collaborate in signing.

,This programs best feature is probably the alert service that notifies you about your signed and non-signed documents.

,You can customize the signing schedule as you want.

The price for your business is only $15 per month, but you can even get free access for three months.

Runner Up: Adobe SignAdobe is one of the popular programs which serves customers with various services.

An e-signature service known as Adobe Sign is one of those.

It has many functions and features.

,The monthly package price for small businesses is $34.

99.

Besides, using Adobe Sign is very easy, and it offers an authentication service.

This service ensures that every document meets basic legal requirements.

,Alternative: DocuSignThis program ranks third in my lists because it is very expensive for single users, and it costs $10 per month.

,In contrast, it has a unique feature, and that is the application of Binding Corporate Rules.

BCR is the highest level of certification for data transferring so you can use DocuSign for legal supports.

,Besides, DocuSign integrates a strong encryption technology that can provide your documents with high security.

Business expense categories spreadsheet

Before looking out for investors for a startup, the first thing you must do is the compilation of a spreadsheet that lays numbers behind profitability path.

,Here are the simple steps of building the financial model for the startup:,Separate the signups u2013 make the distinction between the trackable signups and others.

,Calculate conversion rates u2013 calculate one conversion rate for wholesales funnel,Determine the average revenues per account by dividing total monthly revenue with paid customers number you serve during the time,Calculate revenues u2013 multiply the ARPA with average customers number per month,Figure in the expenses u2013 look at suggested expense categories on the template and adjust them to meet your business.

,Calculate SAAS Customer Churn u2013 at the early stage of company growth, start the tracking of customer churn.

It equals the customers number who cancel service over a particular interval divided with the customer number you had at the beginning.

What are business expenses

What are business expense categories?For Businesses, there are five business expense categories that you should pay extra attention to:,Business travels: The authorities are always studying such business travels.

They might ask extra details to explain why those are not also personal activities, and merely business expenses.

Therefore itu2019s important to keep track of your receipts, which also provide a paper trail of your business activities while your employees or yourself are away.

,Meals and entertainment: When you are conducting business meetings on a regular basis, in a hotel, cafe or restaurant, itu2019s a pleasant option to discuss business and bond with relations as well.

Just make sure that you keep track of these expenses (on a daily basis).

A helpful suggestion is to write on the back of the receipt the basic information about meeting or connection, in order to record who attended and the purpose of the meal or outing.

,Vehicle-related expenses: Make sure to record when, where, and why you used the automobile for business purposes, and then apply a percentage of the usage of this vehicle as related expenses.

,Receipts for gifts: When you buy gifts for your business relations, for example, tickets to a football match it matters whether the gift giver goes to the event with the recipient.

If they do, itu2019s better to mention those expenses are categorized as u201centertainmentu201d, rather than a gift.

Note these details on the back of the receipt as well.

,Home office receipts: Keeping your office receipts is similar to the vehicle expenses.

You need to calculate what percentage of your home is used for business and then apply that percentage to home-related expenses.

When you are starting your business from your own home, it provides a good way to keep your overhead low, and it also might qualify you for some unique tax breaks (depending on your country of residence and business).

Youu2019re able to deduct the portion of your home thatu2019s used for business, as well as your internet connection, cell phone, and transportation to and from work sites and for business errands.

,An example that is useful is this Business Expense Excel sample, which shows how to: Every month the expense statement should be authorized by a supervisor before submitted to the Finance Manager or Department.

,Explainer video on this topic: