conversation: User (AlifeofSimileS): "My girlfriend and I have been trying to start our own businesses for about a year now. We're at the point where we can live off of the income that she gets from flipping appliances, and I from flipping ohv's. If we were to do that, I'd have no clue how to pay income taxes for either of us, or what things are deductible. What should I keep track of and who do I go to with all this information at the end of the year? Does it matter that some ohv's I buy and sell don't have titles?...  Also, how do I pay for all of the other taxes besides income? Would it be better if she and I created a single business, or if we created our own?  "
  Self: "I agree with the other commentor, you probably want separate businesses. One accountant should be able to do that for you. Or, honestly, if you can work a calculator and have the interest, take a few accounting courses at your local college. No offense to anyone, but business accounting and taxes aren't rocket science."
  User (AlifeofSimileS): "That's my plan for the near future, but all too many times I've taken courses and got none of the information I was expecting from it . So I'd figure I'd ask you guys and I can google from there...   Thank you both for the info"
  mail323 (mail323): "The most important thing is to keep records. Every dollar you spend for business related expenses and every sale you make. If your making enough to live on you'll probably also have to start paying sales tax, well you always have to but nobody's going to go after you for a yearly yard sale or occasional sale on eBay. Even the best accountant will have a very hard time especially if you're e.g. buying appliances with cash from craigslist or yard sales. Sure you could fill out all the numbers on your tax return and probably get away with it, but in the rare case you get audited they aren't going to allow deductions for expenses you didn't document."
  User (AlifeofSimileS): "Ok so document, document, document.  I also read that if deductibles out cost profits than its a net loss...     So here's something I'm not understanding, if I buy an atv on Craigslist for 500 and it needs a new battery and tires to function properly...  I buy tires and a battery for it at a total of 500.  I sell the atv for 2500.  Are the tires and battery deductible? And if so does that lower what I have to claim as profit? Basically, would I claim 2000 as a profit with 500 deductible, or would I claim 1500 profit and 500 deductible? The latter would increase my claimed deductible cost and lower my overall profit bringing me closer the being at a net loss, correct? If so, am I able to just not claim those deductibles and claim a higher profit to keep from registering a loss?"
  wigglewigglewig (wigglewigglewig): "I think you may want to stop thinking of business expenses as deductible because it seems to be confusing you.(although obviously they are)  You are taxed only on profit from your business. Your profit is determined by subracting your expenses from your revenue. So, you buy an item for 500 and then spend 500 on repairs.  Your total expense is 1000. You then sell it for 2000. 2000 minus 1000 is 1000. Your taxable income for that transaction is 1000."
  