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I have a small insurance agency and my cpa...
Posted on 12/9/09 at 8:41 am
Posted on 12/9/09 at 8:41 am
I sent over to him my income and expenses and it seems that he is not deducting 100% for anything like leads and such. If I made 200K and spent 30k in leads shouldn't that move my taxable income to 170k? Any advice and suggestions on a cpa that knows the insurance business would be greatly appreciated.
5
Posted on 12/9/09 at 10:19 am to jepmyers
What kind of expenses do you consider lead expenses?
Posted on 12/9/09 at 10:31 am to TROLA
buying direct mail leads from lead vendors
Posted on 12/9/09 at 10:31 am to TROLA
buying direct mail leads from lead vendors
Posted on 12/9/09 at 11:03 am to jepmyers
"buying direct mail leads from lead vendors"
Did he give you a reason on why these were not 100% deductible? I'm not in the tax game anymore but I cant understand why these wouldnt be 100% deductible. Is it possible that hes is treating the list as an asset?
ETA: If treated as an asset, you could ask to sec 179 the list based on how its classified.
Did he give you a reason on why these were not 100% deductible? I'm not in the tax game anymore but I cant understand why these wouldnt be 100% deductible. Is it possible that hes is treating the list as an asset?
ETA: If treated as an asset, you could ask to sec 179 the list based on how its classified.
This post was edited on 12/9/09 at 11:11 am
Posted on 12/9/09 at 11:23 am to jepmyers
business expense and it is deductible.
Posted on 12/9/09 at 12:14 pm to amsterdam
sounds like you need a new CPA
Posted on 12/9/09 at 12:43 pm to jepmyers
Just ask the question....TO HIM! If he is a CPA he is probably a professional and can handle your questions professionally which means stupid or not. He knows more of the details than any TD posters. Then if you disagree come for advice. We don't have any idea what his side is so calling him stupid or saying you need a new CPA is stupid, at this point.
Posted on 12/9/09 at 1:12 pm to LeonPhelps
ALL CPA's are not tax experts- they specialize like the rest of the world-
Saying something is stupid does not make it stupid
Saying something is stupid does not make it stupid
Posted on 12/9/09 at 2:20 pm to 756
You want to put this CPA in the all category and not the specialized category without knowing the CPAs side of the story?
The OP barely gave anyone enough information to make any decision much less the Money Board experts. I need to know the CPAs basis for his decision to not expense everything because he has more details than Revenue - Leads = Taxable Income.
The OP barely gave anyone enough information to make any decision much less the Money Board experts. I need to know the CPAs basis for his decision to not expense everything because he has more details than Revenue - Leads = Taxable Income.
Posted on 12/9/09 at 2:40 pm to LeonPhelps
Sounds like Leon is the OP's CPA.
Posted on 12/9/09 at 2:51 pm to BeBeaux
quote:
Sounds like Leon is the OP's CPA.
Hahaha. Not quite. I am do audit/corporate accounting.
Posted on 12/9/09 at 3:51 pm to LeonPhelps
Lets say the OP make 200k.
He pays 30k for leads.
In addition he drives 30k a year @ 49 cents a mile.
He has another 5k in misc expenses.
These are his business expenses.
He should pay taxes NOT on the 200k, but rather on approximately 150k right.
At 28% (federal) .
So about 40k or so in federal taxes ?
He pays 30k for leads.
In addition he drives 30k a year @ 49 cents a mile.
He has another 5k in misc expenses.
These are his business expenses.
He should pay taxes NOT on the 200k, but rather on approximately 150k right.
At 28% (federal) .
So about 40k or so in federal taxes ?
This post was edited on 12/9/09 at 4:22 pm
Posted on 12/9/09 at 4:21 pm to Lsupimp
no b/c the 28% would only be paid on the top tier of income, and I am sure he would have other deductions,
Posted on 12/9/09 at 4:22 pm to Lsupimp
I don't think the OP's question is whether or not he should have to pay taxes on all Revenue but why is he getting partial deductions on some expenses. I may be wrong on that.
Posted on 12/9/09 at 4:29 pm to LeonPhelps
Same.
ETA: But I don't know anything about "leads," so I'm just waiting for poodle to come and own bitches.
ETA: But I don't know anything about "leads," so I'm just waiting for poodle to come and own bitches.
This post was edited on 12/9/09 at 4:30 pm
Posted on 12/9/09 at 4:33 pm to Lsupimp
quote:
In addition he drives 30k a year @ 49 cents a mile.
Why not 55 cents a mile per IRS in 2009?
Posted on 12/9/09 at 5:27 pm to tirebiter
quote:
Why not 55 cents a mile per IRS in 2009?
I know this is '09, but is it dropping to $0.49 in 2010...that's what i heard.
Posted on 12/9/09 at 6:00 pm to jepmyers
in some instances when you pay for mailing lists you are required to depreciate the amount over the useful life.
Also, meals&entertainment are only deducted at 50% if you are referring to these types of expenses
Also, meals&entertainment are only deducted at 50% if you are referring to these types of expenses
Posted on 12/10/09 at 10:55 am to jepmyers
For an expense to be deductible it must be ordinary and necessary. I think a solid argument can be made that purchasing mailing lists of potential leads is an ordinary practice for many businesses and for insurance agents in particular. Demonstrating the necessity may be more challenging, but there is no question that it promotes efficiency in your advertising and marketing.
The counter-argument is that the mailing list may have a useful life of greater than one year, and its cost should be capitalized and amortized over its useful life.
I'd be inclined to claim a deduction for the expense, but I'd have to look at the number of leads relative to the cost and your agency's ability to solicit the leads. If it would be impractical for you to effectively solicit all prospects within a year then I might recommend capitalizing some of the cost.
The counter-argument is that the mailing list may have a useful life of greater than one year, and its cost should be capitalized and amortized over its useful life.
I'd be inclined to claim a deduction for the expense, but I'd have to look at the number of leads relative to the cost and your agency's ability to solicit the leads. If it would be impractical for you to effectively solicit all prospects within a year then I might recommend capitalizing some of the cost.
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