IRS SUCKS

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Tom,
I assume you've done it, but if not, you might want to go to a tax professional (attorney and/or CPA). They may be able to help you figure out how to your current exposure and how to reduce the likelihood of this happening in the future.
 
Originally posted by Pen Man
<br />When you seem to get ahead you get kicked in the teeth, [B)][B)] April 15 I have to write a check for $78000.00[:(!][:(!][:(!] for my plumbing co.[V][V][V][V]
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The way I see it...if you have to pay $78,000.00 in taxes, you must have made a TON of money. So be happy and thankful [;)]

Or is this a stealth GLOAT? [;)][:D]
 
John,

I agree with you and Jim...send them (IRS) the least you have to but the fact remains that the figure mentioned is just a fraction of what the business made.
 
It sounds like you need a much better system of allowing for taxes throughout the year. We've gotten kicked in the teeth year after year because we were basing the numbers on the previous years sales and business increased drastically each year. We finally hit upon the correct percentage to hold out for taxes and other stuff, and this will the first year in a long time that we will actually get a little back. We hold out money each and every week based on that percentage and it goes into a separate account so it's never seen. I think we hold 40% right off the top, but that also pays the bills.
 
I went through that on a much smaller scale for years. Finally I incorporated my dental office, which gave me some benefits, and was set up on a schedule of quarterly tax payments. Too many business owners choose to pay other bills first, the fact is you HAVE to pay the IRS bill first.

FWIW,
 
REMEMBER ALL!! The IRS bills you based on "paper profits", not your cash-in-hand.

A growing business can owe the BANK a ton of money, pay incredible amounts of interest and be sitting on assets that makes the company look VERY rich. IRS does NOT want any part of ANYTHING but cash, which you then have to borrow, increasing your exposure with the bank who then raises the interest rate and thereby diminishes your growth.

If all goes REAL well, they tack on penalties (sometimes as much as the tax owed) and interest and attempt to put you OUT of business. IF they don't succeed the bank, who only promises to finance you one year at a time, then decides you are a REALLY high risk, so they won't renew your loans. Other banks, hearing this, also don't want to give you loans. SO, you end up in "default" in spite of keeping your payments completely up to date, and they assign you an interest rate of 18%. On a $500,000 line of credit, this means you owe the bank $7500 a month.

America is the land of opportunity. BTW, I survived the above scenario. BUT, being in business for yourself AIN'T all it's cracked up to be.

GOOD LUCK, TOM and start preparing to find a different bank, NOW, before the proverbial hits the fan (I wish I had). Money is always EASIEST to get when you DON'T NEED it.
 
Originally posted by Pen Man
<br />When you seem to get ahead you get kicked in the teeth, [B)][B)] April 15 I have to write a check for $78000.00[:(!][:(!][:(!] for my plumbing co.[V][V][V][V]
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And you didn't see it coming?

That's your fault for not having the proper systems in place.

Just because you are a good plumber and know how to run a business doesn't mean you are a good accountant too. MANY growing concerns have bitten the dust for making a big mistake like this.

To others, Just because he owes $78,000 to the IRS doesn't mean he is making a profit.
 
Originally posted by Ron in Drums PA
<br />
To others, Just because he owes $78,000 to the IRS doesn't mean he is making a profit.
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Really? I must be very naive then. I am not an accountant but thought I know more than this.
 
It means you're pulling in lots of money. That can be worlds away from being profitable. The real trick is to have less money going out than coming in. Easier said than done sometimes with your own business.
 
As far as I know...only actual profit (not receivables) is taxable. So to have a $78,000.00 tax means you have to have made atleast $222,857.00 profit + exception deductibles (assuming $35% tax bracket). Again, I may be mistaken but this is what I know.

IF you spend more than you should on something else, then that is a totally different problem...but don't say that profit was not made.

I do know that "creative" accountants can help you reduce what you have to pay...but that is a different matter.

Any tax expert here who can shed some light on this?
 
Originally posted by Pen Man
<br />I was not bragging. [:(][:(] I was -----ing, [:(!][:(!] if i know this was coming I would of gave a big Bonus to my employees [8D][8D] and been a good boss.
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Believe me, the thought never occurred me that you where bragging.

So, what are you going to do for this year's taxes? Whine about it next year on IAP?

You have 9 months left to get it right, get to work.
 
I agree with Ron on this; you really need to set aside a lot more money than you think. Every year in the past, we always thought we were on top of it and found we have to pay yet another $18K or something, all at the same time the 1st quarter's of the next year's taxes are due also. You need to really put it aside on a daily or weekly basis because you can't be tempted to think it's your money otherwise there will always be some sort of business expense that will take it. If you don't have money in your normal account, you can't spend it. You'll need to rethink what's the "normal" cash situation.
 
Believe me, the thought never occurred me that you where bragging.

So, what are you going to do for this year's taxes? Whine about it next year on IAP?

You have 9 months left to get it right, get to work.
[/quote]

I will just have the wife double it $78000.00 X 2 and pay it in so we are good for next year!!!!!!!!! [8D][8D][:D][:D]
 
Originally posted by Pen Man
<br />Believe me, the thought never occurred me that you where bragging.

So, what are you going to do for this year's taxes? Whine about it next year on IAP?

You have 9 months left to get it right, get to work.
Click to expand...

I will just have the wife double it $78000.00 X 2 and pay it in so we are good for next year!!!!!!!!! [8D][8D][:D][:D]
[/quote]

Now you sound like you are bragging.
 
The Infernal Revenue Service is constantly holding us in fear. How many other agencies are we more afraid of than the IRS????

I am a disabled firefighter and was audited last year because according to the IRS I owed over $48000.00 in back taxes plus penalties because of unreported income.My disability income is non taxable per IRS code. It took a couple accountants that could not figure out where the problem was. I finally called my unions retirees office and they were able to qoute the IRS code without even looking it up, Letter to IRS siting code and letters from IRS to Illinois Proffesional Firefighters Assn cleared up the problem but not without many sleepless nights and TUMS.

GET ANOTHER OPINION AND DO NOT BACK DOWN!!!!!!!
 
It's weird to read all this....I adopted three kids and have three kids of my own...the IRS PAYS me![:D]

(actually, if you adopt a child over 8 years old {this is classified "unadoptable" and puts them in a "special needs" class}, the government has special programs for taxes to help with the costs....I am kidding about the IRS paying me, but I do get a sizable refund every year)[;)]
 
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