# Should she start a business???



## poobar (Feb 20, 2011)

A couple of months ago now, my wife started doing house cleaning for a couple of people to get a bit of extra money each week, not thinking anything would come of it really. One of my kids is still in JK at school so only part time.

Well, this couple has now turned into 1-2 a day whenever she can fit it in around the kids so the moneys not bad, and she is still getting more calls.

The problem/opportunity is that she is using her own car, gas, vacume, cleaning products etc and I am now contemplating should she set a business up for the tax benefits??

In a year, all the kids will be full time at school so she can do more. Sharting now allows her to build slowly and expand when all the kids are out.

Thoughts????


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## Riceburner (Mar 14, 2008)

if it makes business sense, Yes do it as a business and write off the expenditures. Keep good track of business use of items, etc. Set aside a space for a home office and there's more you can write off.


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## PACMAN (Mar 4, 2010)

....that's assuming she is claiming the income. (which is the right thing to do!)


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## gucci17 (Oct 11, 2007)

It all depends...do you forsee her exceeding the non taxable income bracket? I think it's around 10k. If she's not, then I don't really see a reason to write stuff off if you're not paying taxes anyways.


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## poobar (Feb 20, 2011)

gucci17 said:


> It all depends...do you forsee her exceeding the non taxable income bracket? I think it's around 10k. If she's not, then I don't really see a reason to write stuff off if you're not paying taxes anyways.


But isn't she paying tax for stuff that she can claim back regardless of the bracket?? (Cleaning stuff, gas etc)


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## characinfan (Dec 24, 2008)

Talk to a lawyer or paralegal about incorporating. It would allow her to write off expenses *and* protect her in case of legal troubles (e.g. something expensive breaks while she's at someone's house, the client tries to sue, etc.)


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## bae (May 11, 2007)

You don't need to 'become a business' if you're self-employed. I did consulting for years, declared the income and subtracted expenses. I had an accountant friend do my taxes the first few times to show me how -- in my case I had supplies and education (books, conferences) to expense, equipment to depreciate, worked from home so I expensed mortgage and utilities for the fraction of the house that was my office, etc.

Keep track of everything, even if you just write it down on a scrap of paper. When the time comes to do taxes, sort it out. You can expense not only gas, but repairs and depreciation on the car, for the fraction of it you are using for the business. It may not turn out to be worthwhile to do all the expensing, etc., but if it is you'll wish you had the paperwork!


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## gucci17 (Oct 11, 2007)

poobar said:


> But isn't she paying tax for stuff that she can claim back regardless of the bracket?? (Cleaning stuff, gas etc)


First off, I apologize as I have no experience with being self employed...yet.

Correct me if I am wrong but isn't the whole reason of writing off stuff to offset the taxes you have to pay on your income?

So if you're not making enough to have to pay taxes what's the point of reducing your taxable income even further when it's already below the minimum bracket?

I'm curious to know this as well...can someone else with experience chime in?


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## 5318008 (Dec 11, 2010)

gucci17 said:


> First off, I apologize as I have no experience with being self employed...yet.
> 
> Correct me if I am wrong but isn't the whole reason of writing off stuff to offset the taxes you have to pay on your income?
> 
> ...


I think he was referring to setting up a business since losses for businesses can be carried forward to offset any future income.


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