Tax write off question?

Discussion in 'Business Operations' started by boxoffire, Mar 20, 2008.

  1. boxoffire

    boxoffire LawnSite Member
    Posts: 169

    How much can one write off in medical costs? I mean for example if I only made a profit of say $15,000 in a year, and had a major medical bill of say $80,000 that same year, would the government send me back $65,000 of the 80K? I know in my first year in business I spent 4K more than I profited and got almost all 4K back. Is there a cap for small sole proprietorships?

    I hope I don't ever run into this scenerio, but you never know.

    Thanks and good season ahead to everyone!
  2. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    You mean the IRS sends you a check for money you spent?
    Please explain how that works, I'd like to know.

    That would be great, I can provide free services then simply deduct all my expenses and voila, the IRS pays me in full what I need.
    Only trick is getting through the year until tax time, but I'll figure that out.
  3. boxoffire

    boxoffire LawnSite Member
    Posts: 169

    Forget it, I'll ask my tax person when I go see her soon. I'm sure she won't have trouble answering with a simple yes or no without being a dumbass.

    CLARK LAWN LawnSite Silver Member
    Posts: 2,526

    i dont think you understand what a write off is. the government is not giving you back money it means that you do not have to pay taxes on that amount because it is not income its the cost of running your business.
  6. boxoffire

    boxoffire LawnSite Member
    Posts: 169

    Sorry for being a bozo on this one, I was just hoping maybe since I've gotten money back from the IRS in the past (almost 4 K) that I might be able to get some back in that scenerio too. It's just no good with expenses for medical I guess. Thanks, I guess.
  7. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    The irs doesnt send you money, they give back money you sent in sometimes. You can ddeduct part of your medical payments on your schedule A deductions form.

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    Like someone said, the best you can do is have your taxes reduced to zero, but they don't give you money back in that situation.

    Even if they did, you would have had to pay for the medical procedure yourself, so if it was 80 grand, YOU would have to pay that yourself, not your insurance co.
  9. retrodog

    retrodog LawnSite Silver Member
    Posts: 2,421

    yeah, a couple of years ago I made over $80000 dollars, but after my write offs, I had a loss. I didn't understand how it worked, and I ended up not getting any of the earned income credits for my kiddos or any credit for that matter. I still had to pay in money for State and Federal. I asked what I do next time and my consultant told me to just throw away alot of expense reciepts, and not use all of my equipment for business use, cause it was ultimately hurting me in the longrun. I have booques of medical bills, but it never helps get money back, I think it just helps bring down what I owe a little. Heck, I was always told to keep reciepts for every penny you spend for your business, this was a whole different approach. At this point I don't have any advice, just wanted to rant a little.
  10. B & B Yardscape

    B & B Yardscape LawnSite Member
    Posts: 131

    To the different post above.

    Medical premimums, out of pocket for the deductable, travel costs, anything YOU paid for can be deducted.

    You have to make (earn) money to get an EARNED income credit. It is there to make the average tax payer feel a little better and turn a blind eye to what the government does with your money.

    You have to pay in in order to get back. I'd break a leg every year if they were going to send me money back.

    Your tax guy should have told you that you had too many deductions when he filled out your taxes and recommened that you don't use some so you can show an income and get the EIC.

    I do my own taxes and if I don't like the numbers, I change them. Legally of course.

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