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JBloggs

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If any of you work outside the B&B say part time for some pocket change, how does this affect your taxes, etc?
If I were to take on a part time job (say from my PC here 15 hours per week on avg) what advice could you give to keep me on the straight and narrow and actually benefit and not toss the extra income away in more tax?
Worrying about going up a tax bracket is my only real concern, but it may be unfounded at this time.
Background, we are not a CORP, we are a sole ppty, we have one innkeeper working outside the inn already and paying reg payroll taxes ss etc, and I am the main innkeeper here who does not receive a paycheck or salary.
Any suggestions or input appreciated!
 

agoodman

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Have been working at home 2nd job since and before I had the B&B (15 hrs a week me thinks Arise??)
I now work 40+ on my 2nd job to try and keep head above water ..
I keep a separate set of books for my 2nd job, I am contracted under the name of my corp ABC corp but ABC corp has ABC CORP DBA My Inn name
The taxes are all together under one umbrella ABC CORP but the expenses are separate in case anyone who maybe one day wants to buy the Inn wants to see the books .. as for moving into a separate tax bracket .. well right now that's not something I have to worry about, it really depends on how much money your Inn is generating. You can move funds between ABC CORP and MY INN NAME as "owners capital" so it may in fact REDUCE the tax you owe if your expenses exceed your income
 

Proud Texan

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We both have pensions on top of our B&B income and handle much the way agoodman does.
Our situation is different in that we live on our pension and take the profits from the B&B and are reinvesting it into the B&B to expand and make improvements (some of which we get to enjoy). The expenditures offset the income thus keeping us in a lower tax bracket.
The result is that we have an excellent tax write-off and that savings translates into being able to pay our annual insurance premiums and property taxes. At some point when expansion and improvements are curtailed, I'm sure our tax situation will change.
 

egoodell

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I work full time outside the B&B and tours. My CPA told us this year I can be cut free as it is starting to cost us I guess in write -offs since my outside job has no write offs. And I assume I'll be able to write off the health insurance we'll start paying for.
RIki
 

gillumhouse

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Please, Folks. It is deductions we take - not write-offs. A write-off is that guest who did not pay and you cannot get to pay so you write-off that debt as a loss. A deduction is our expenses. There is a HUGE difference and we need to understand the difference. Hospitals, municipalities, and businesses write-off uncollectable debts.
 

EmptyNest

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I work full time outside the B&B and tours. My CPA told us this year I can be cut free as it is starting to cost us I guess in write -offs since my outside job has no write offs. And I assume I'll be able to write off the health insurance we'll start paying for.
RIki.
You can deduct your health insurance, but if you don't have the % or medical deductibles, it won't matter because it won't come off the top just as health insurance. I think it is 7% of your gross income or close to that.... Only anything over that can be deducted as medical expenses.
 

IronGate

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I work full time outside the B&B and tours. My CPA told us this year I can be cut free as it is starting to cost us I guess in write -offs since my outside job has no write offs. And I assume I'll be able to write off the health insurance we'll start paying for.
RIki.
You can deduct your health insurance, but if you don't have the % or medical deductibles, it won't matter because it won't come off the top just as health insurance. I think it is 7% of your gross income or close to that.... Only anything over that can be deducted as medical expenses.
.
catlady said:
You can deduct your health insurance, but if you don't have the % or medical deductibles, it won't matter because it won't come off the top just as health insurance. I think it is 7% of your gross income or close to that.... Only anything over that can be deducted as medical expenses.
So you're saying health insurance premiums are considered part of your medical expenses? I've always wondered how health insurance is handled on the tax return, and this method certainly makes sense.
 

egoodell

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Please, Folks. It is deductions we take - not write-offs. A write-off is that guest who did not pay and you cannot get to pay so you write-off that debt as a loss. A deduction is our expenses. There is a HUGE difference and we need to understand the difference. Hospitals, municipalities, and businesses write-off uncollectable debts..
gillumhouse said:
Please, Folks. It is deductions we take - not write-offs. A write-off is that guest who did not pay and you cannot get to pay so you write-off that debt as a loss. A deduction is our expenses. There is a HUGE difference and we need to understand the difference. Hospitals, municipalities, and businesses write-off uncollectable debts.
This is why we use our CPA.....
RIki
 

JBloggs

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I work full time outside the B&B and tours. My CPA told us this year I can be cut free as it is starting to cost us I guess in write -offs since my outside job has no write offs. And I assume I'll be able to write off the health insurance we'll start paying for.
RIki.
You can deduct your health insurance, but if you don't have the % or medical deductibles, it won't matter because it won't come off the top just as health insurance. I think it is 7% of your gross income or close to that.... Only anything over that can be deducted as medical expenses.
.
catlady said:
You can deduct your health insurance, but if you don't have the % or medical deductibles, it won't matter because it won't come off the top just as health insurance. I think it is 7% of your gross income or close to that.... Only anything over that can be deducted as medical expenses.
So you're saying health insurance premiums are considered part of your medical expenses? I've always wondered how health insurance is handled on the tax return, and this method certainly makes sense.
.
IronGate said:
catlady said:
You can deduct your health insurance, but if you don't have the % or medical deductibles, it won't matter because it won't come off the top just as health insurance. I think it is 7% of your gross income or close to that.... Only anything over that can be deducted as medical expenses.
So you're saying health insurance premiums are considered part of your medical expenses? I've always wondered how health insurance is handled on the tax return, and this method certainly makes sense.
Unless you have catastophic medical bills, you will not meet the % of your income to itemize your health care costs - including premiums, you will end up just taking the standard deduction.
(Gee sounds like I have been doing this for a few years aye! haha)
 

muirford

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I work full time outside the B&B and tours. My CPA told us this year I can be cut free as it is starting to cost us I guess in write -offs since my outside job has no write offs. And I assume I'll be able to write off the health insurance we'll start paying for.
RIki.
You can deduct your health insurance, but if you don't have the % or medical deductibles, it won't matter because it won't come off the top just as health insurance. I think it is 7% of your gross income or close to that.... Only anything over that can be deducted as medical expenses.
.
catlady said:
You can deduct your health insurance, but if you don't have the % or medical deductibles, it won't matter because it won't come off the top just as health insurance. I think it is 7% of your gross income or close to that.... Only anything over that can be deducted as medical expenses.
So you're saying health insurance premiums are considered part of your medical expenses? I've always wondered how health insurance is handled on the tax return, and this method certainly makes sense.
.
IronGate said:
catlady said:
You can deduct your health insurance, but if you don't have the % or medical deductibles, it won't matter because it won't come off the top just as health insurance. I think it is 7% of your gross income or close to that.... Only anything over that can be deducted as medical expenses.
So you're saying health insurance premiums are considered part of your medical expenses? I've always wondered how health insurance is handled on the tax return, and this method certainly makes sense.
Unless you have catastophic medical bills, you will not meet the % of your income to itemize your health care costs - including premiums, you will end up just taking the standard deduction.
(Gee sounds like I have been doing this for a few years aye! haha)
.
Joey Bloggs said:
Unless you have catastophic medical bills, you will not meet the % of your income to itemize your health care costs - including premiums, you will end up just taking the standard deduction.
There are a few ways to deduct your health insurance costs. If you are self-employed in your second job, you can deduct your health insurance costs against your self-employment income on your 1040, not on the schedule C. Alternatively, you can set up an HRA account, if you have a sole proprietorship with employees, and if you are an employee of the business you can be reimbursed for your medical expenses, including the premiums. Then the health insurance costs become a line item expense for your business, and deducted from your taxes. An HRA account needs to be managed by a company that specializes in them, and you will pay a small amount for the services.
I'm guessing this is a less important issue for you if your DH covers you for health insurance. One other thing to be aware of is if you become self-employed in your part-time job you will owe self-employment taxes, 1/2 of which can be deducted on your income tax return. It is a good idea to start paying estimated taxes quarterly if that will be the case.
 
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