You don't pay taxes on the net amount due, but on the amount received. David Love davidlovepianos@earthlink.net > [Original Message] > From: Arlin Hall <ahall12@austin.rr.com> > To: <Pianotech@ptg.org> > Date: 1/30/2004 6:32:16 PM > Subject: Deductibility... > > Hi David, > In the "Dealer" scenario, you are actually receiving the $65. Which is what > you taxes would be based on. The dicount of $10 was given in arriving at > the $65 figure. So on your books, (and on the invoice) you could show: > > +75.00 Tuning Fee > -10.00 Dealer Discount. > ------ > $65.00 Net amount due. (and net amount of taxable income) > > In the referral fee scenario, you indeed receive $75.00. But you also write > a $10.00 check as a referral fee, which is a tax deductible expense. > Granted, that won't be shown on the customer's invoice because the referral > fee is paid out to someone else. But on your financial statements and tax > return Schedule C the net effect is the same. > > +75.00 Tuning Fee > -10.00 Referral fee paid out to someone else. > ------ > $65.00 Net amount kept by you, and reported on your taxes, as far as this > tuning is concerned. > > In both scenarios, you end up with $65.00 net taxable. Not $55 or $75 as > you stated in your response. (I see in a later post you did change the $75 > to $65). > > Arlin Hall, CPA > > -----Original Message----- > From: David Love [mailto:davidlovepianos@earthlink.net] > Sent: Friday, January 30, 2004 7:59 PM > To: Pianotech > Subject: RE: Deductibility of referral fees, etc. > > > It's not quite the same thing. However you book it, your income is based > on money actually received and you would be deducting $10.00 from $65.00 > worth of income paying taxes then on $55.00. In the referral fee scenario, > you receive $75.00 and you pay out $10.00 with a taxable remainder of > $75.00. Of course, you could always deposit the money in an offshore bank. > Or just pretend you did, like those great guys over at Enron. > > David Love > davidlovepianos@earthlink.net > > > _______________________________________________ > pianotech list info: https://www.moypiano.com/resources/#archives
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