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Independent contractor routes that net over 1,000,000 a year
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<blockquote data-quote="dmac1" data-source="post: 1849295" data-attributes="member: 60252"><p>That number likely doesn't include the reduction in value of his vehicles over the year. Depreciation is written off annually but not realized until the vehicle is sold. That fact disquises the actual income by putting off the loss until later, while taking a tax savings now, falsely inflating annual income.</p><p></p><p>For example, if I have a van 1 year old at the beginning of the year, worth $50,000, and at the end of the year worth $35000, and saved $5000 on my tax bill by deducting depreciation, you can show a net income of maybe $50,000, but the vehicle is worth $15000 less than at the beginning of the year. </p><p></p><p>Unless you take that loss into account, you are fooling yourself. Leasing a vehicle can help with accounting for that if your lease takes into account all the miles you drive. If you have a per mileage cost over a certain number of miles, then until the lease is over and you pay that fee, you need to take that fee figured as an annual cost and deduct from the net income. </p><p></p><p>Point is that net income needs to be looked at to make sure that deferred out of pocket expenses are subtracted. If you suddenly become unable to operate for fedex, and need to sell a van, that is when you can take a huge hit, and the more vehicles you have, the bigger the hit.</p></blockquote><p></p>
[QUOTE="dmac1, post: 1849295, member: 60252"] That number likely doesn't include the reduction in value of his vehicles over the year. Depreciation is written off annually but not realized until the vehicle is sold. That fact disquises the actual income by putting off the loss until later, while taking a tax savings now, falsely inflating annual income. For example, if I have a van 1 year old at the beginning of the year, worth $50,000, and at the end of the year worth $35000, and saved $5000 on my tax bill by deducting depreciation, you can show a net income of maybe $50,000, but the vehicle is worth $15000 less than at the beginning of the year. Unless you take that loss into account, you are fooling yourself. Leasing a vehicle can help with accounting for that if your lease takes into account all the miles you drive. If you have a per mileage cost over a certain number of miles, then until the lease is over and you pay that fee, you need to take that fee figured as an annual cost and deduct from the net income. Point is that net income needs to be looked at to make sure that deferred out of pocket expenses are subtracted. If you suddenly become unable to operate for fedex, and need to sell a van, that is when you can take a huge hit, and the more vehicles you have, the bigger the hit. [/QUOTE]
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Independent contractor routes that net over 1,000,000 a year
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