So I'm considering buying a Mac and a bunch of productivity and development software to make iPhone apps. I don't expect to make much money doing it (yet), but it might be nice to have the tax write-off on the potentially thousands of dollars I might spend on new gear. Has anyone started their own side business and taken advantage of the tax write offs? Does it complicate tax filing much (beyond having to buy a more expensive edition of Turbo Tax)? Is it even a good idea?
I don't know everything about it, but here, for me, working as a computer consultant, I had to get a state business license, a city B&O license, and I have to file tax statements (and pay taxes) quarterly to the city. If I make enough, I have to pay Estimated Self Employment tax to the IRS. YMMV
A friend of mine started his own business and makes IPhone apps whitehuskysoftware.com . He is the creator of the famous Candy Heart IPhone app...famous around Valentines Day anyway.
My home business (in the software/support field) required a DBA from the state, and quarterly tax payments to the IRS. If I sold directly to end users (which I don't) I would also have to file sales tax reports. I let an accountant figure out the taxes. It's worth it to me.
Thanks, all. Follow-up: has anyone tried sorted through running a side business in addition to being a W2 employee for someone else?
Look, being a W-2 employee is easy. Just report and either write a check or get a refund. Self-employed (S/E) is another animal all together. It takes record keeping, being current on tax law, and you ARE the business meaning receptionist, accounting dept, profit and loss projector, and tax filer. Due to the extent of tax abuse in the past most taxing authorities are wise to any back door approach you can think of including front loading depreciation, claiming losses to offset other (W-2) income, and any other scheme you can think of. Best to go into business with the intent to make a killing than to hope to run a little cottage business with the intent of offsetting (avoiding) taxes. Hire an experienced tax accountant to get you up and going. You'll either pay the accountant now or pay later through unclaimed deductions and or audits and associated problems. Good luck!
I'm self employed. I'm smart enough to know, that I'm not smart enough to do the taxes. My best advice to you is ask your friends, relatives, and co workers who a good accountant is. Make an appointment with them now, not next April. My insurance agent help me set everything up for the business. Don't have much useful to add... Did you know that Stanford University has a course on writing i phone apps? It's available on i Tunes.
Don't get me wrong. I'd hope to make a killing. I'm just being realistic, I'm not ready to quit my day job, and it would be nice to get a tax break on the initial overhead (because I'm sure the government will tax as normal if I start making money). Just to clarify, however, I'm the type of guy who pays his mother to be a nanny, and makes sure to take every cent of taxes out (instead of paying her under the table) to do things properly. I think I'll follow everyone's advice and ask an accountant friend, however. I downloaded the first part of the Podcast when it was first released. It was interesting, but basically just the slides from the presentation in .pdf form. I bought a book on iPhone development that I suspect will be more useful, and I'll probably have to buy one on Objective C, too.
I don't know much about starting a business but I have an idea for an app. Like Evan, I think it would be successful. From day one I've been looking for this app.
I've been self employed pretty much my whole life. Your business will need to make a profit eventually in order to take tax deductions. It use to be you had three years to turn a profit, don't know what it is now. Find out from an accountant what tax deductions are often flagged for audits. Home office usually is a major flag. Even if you are doing everything totally correct it's still a hassle to be audited. I've been audited several times and the IRS has always decided in my favor. I've never been to one of my audits, but it's still a lot of work, not to mention the cost of the CPA. Do you really need thousands of dollars worth of computer stuff to develop a iphone app? Can you develop an app with what you have now or are you trying to justify (with a tax deduction) new computer gear? A small business especially in a field you enjoy that makes a minimal profit and a side real estate rental are two really good ways to legitimately offset W2 taxable income. If there isn't one, write an app for starting a business to make apps. Good luck.
I'm headed to the porcelain throne for a little business right now. :rockon: Wildkow p.s. please do up a decent "Task" app! p.p.d. whoever made "Wobble" must be rolling in the dough!
I don't currently own a Mac, so I'd at least need a maxed-out Mac Mini (which is the plan), you need to pay $150 to join the program, and I plan on getting the new iPhone to utilize some of its new features (plus maybe virtualization software and Office for Mac). So far, my idea for an app is one that farts and burps! Okay, not really. I do have a few ideas, but I appreciate everyone telling me theirs, too!
