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Ways Through the Maze: A Tax Guide for Indies

Inaugural Issue
Hello Fellow Indie,
 
There's a huge economic storm blowing. Maybe it's just a passing thunderstorm or maybe it's climate change. Whatever it is, it's affecting everybody, and it's soaking indies to the bone.
 
Self-employed people - I call them indies - now, more than ever, need help.  All of us indies want to pay less tax, save time on recordkeeping chores, reduce stress, and protect ourselves against audits. 
 
I have been a tax consultant for the self-employed since 1979. My goal is to help simplify your tax life and promote indie-business self-confidence.
 
In Ways Through the Maze I will humanize tax issues with glimpses into the lives and concerns of self-employed people. Each issue will include one or more Q&As that I think will be useful to you. They come out of real-life situations of indies who have visited my blog or my website. Each will be A Slice of Indie Life.
 
From time to time I'll also announce indie happenings of interest to you.
 
I'm sending this to you because you took the first step and contacted me via my site or my blog with a request for info or a question about tax or indie-business matters. Ways Through the Maze will take you a few more steps forward. To travel more swiftly and sure-footedly through the tax maze be aware that you can find scads of useful information on

Wishing you success in weather-proofing your indie venture, 
June Walker
June Walker
Consultant to Indies
June's Book
 
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Ways Through the Maze

Will bring you clear and simple solutions to complicated situations about
  • income
  • expenses
  • taxes
  • recordkeeping
  • indie pensions
  • being self-employed

Look below for this month's

 Slice of Indie Life 
 
Both Employee and Self-employed
June,

I am starting a consulting biz but have an opportunity to work 20 hrs./week for a large company that requires I go through Manpower. The Manpower gig would most likely last only 3-6 months. It would be worthwhile for me to take it.
 
My question is, how much of my annual income must be directly paid to me as an indie vs. through an employer like Manpower, in order for me to make the business expense deductions I want to make while starting my new business?

Thanks! -Ann, Los Gatos, CA


Ann, I think you are asking me if you can be both an employee and a self-employed at the same time. Yes, you can.

I think you are also asking me if you need to make a certain amount of money before you can consider yourself a self-employed or before you can deduct business expenses. No, there is no amount you must earn. Even if you make no money, as long as your goal is to make a profit, then you are self-employed.

You might want to read my blogpost, MID-YEAR SELF-EMPLOYMENT. It touches on the same question. I am sure that you will also find very helpful, Feature #8: I am a Business, on my site.

And, as always, read the book that can simplify your tax and financial life, AND save you money!
SELF-EMPLOYED TAX SOLUTIONS .

Good luck in your new venture!
June
Deducting Dunkin Donuts: Meals on the Road
Hi June,

My husband is a finish carpenter. He works for one company but is considered an independent contractor and gets a 1099 so we deduct for a lot of things at tax time. My question is this: Can he deduct for food expense while he is out on the road driving to and home from work? The reason I ask is I added up all his Dunkin Donuts receipts for coffee he buys while at work and it was $1,212.00 for the year of 2006. I'm hoping we can deduct this but I seem to remember the woman at H&R Block saying we couldn't. Please help us to know what we can and cannot deduct.

Thank You!!
Julie


Good Golly, Miss Julie! That's about $24 a week on donuts. Maybe it's time for celery sticks and carrots. A lot cheaper, too, because lunch on the job is not deductible. The only time regular meals are deductible is when your husband is traveling, and travel means overnight.

Best,
June