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Hey all,
I have a small Sole Proprietorship LLC that does consulting work from time to time. Currently, we have a two year contract to evaluate an education grant. The contract is for $22.5k per year. My subs cost me about 16-17k per year for the work, which leaves me with around 6k in the account. Whatever is left over, counts as my income and hence becomes a tax burden. Not a big concern, and I want to pay my fair share of taxes, but if anyone has advice as to what to do with the money that is both fair and constructive, let me know. I am counting on setting aside ~30% to offset the increased tax burden. I generally get back ~1-2k from my regular job, but I want to reimburse myself for whatever is lost due to having that extra income that wasn't taxed beforehand.
I've already bought what I need for the work we do (work printer, website costs, etc), so we don't really "need" anything. Can I hold future, known, expenses in early FY 2013 and not count that as taxable income? As an example, in early FY 2013 we'll be doing an evaluation, and I know there will be food costs for the subs. Can I set aside, for example, $300 in petty cash, claim it as a business expense and not be taxed on it (so long as I legitimately use it on the designed expense).
Thanks all for any ideas you can provide. I know this is a business question, in a personal finance area, but because its SP LLC, it could have an impact on my personal finances.
I have a small Sole Proprietorship LLC that does consulting work from time to time. Currently, we have a two year contract to evaluate an education grant. The contract is for $22.5k per year. My subs cost me about 16-17k per year for the work, which leaves me with around 6k in the account. Whatever is left over, counts as my income and hence becomes a tax burden. Not a big concern, and I want to pay my fair share of taxes, but if anyone has advice as to what to do with the money that is both fair and constructive, let me know. I am counting on setting aside ~30% to offset the increased tax burden. I generally get back ~1-2k from my regular job, but I want to reimburse myself for whatever is lost due to having that extra income that wasn't taxed beforehand.
I've already bought what I need for the work we do (work printer, website costs, etc), so we don't really "need" anything. Can I hold future, known, expenses in early FY 2013 and not count that as taxable income? As an example, in early FY 2013 we'll be doing an evaluation, and I know there will be food costs for the subs. Can I set aside, for example, $300 in petty cash, claim it as a business expense and not be taxed on it (so long as I legitimately use it on the designed expense).
Thanks all for any ideas you can provide. I know this is a business question, in a personal finance area, but because its SP LLC, it could have an impact on my personal finances.
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