What to do with Scrap?

[Art]

Hi Tex,

Sorry I got complicated. Capitalization is just the money you put up (that you already paid taxes on) to start your business. Never lose track of it because it is your money and none of it belongs to US. It is very handy for things like retaining earnings without paying taxes on them. Also a good little slush fund you can just "draw" against and not pay self-employment taxes.

I have the distinct fortune (or misfortune) of having a better half that has been in the CPA business for 35 years, overall it has been a real help, and it has to be done right for her professional ethics reasons. I showed her the article in LCSJ and while it didn't confuse her, she agreed with my impression that they were making this a lot harder than it really is. She says that things do get complex when you run a business that has really grown over the years as a sole proprietorship, but a business with 10 to 20 emplayees can be managed without a lot of fuss. Probably something most of us are not going to experience, it would take all the fun out of it.

Art

Oh jeeze.... stop it. You're making my head hurt. My eyes glaze over everytime I read some article about taxes and business this and that. I understand income and I understand outgo. As long as I have more income than outgo and I don't try to deduct a trip to the Mustang Ranch as a business expense, I rather doubt Ol' Comrad Samski will be snooping around my underwear drawer for a little undeclared income..... besides, that ain't where I stash it anyhow. I do appreciate the correction on deducting the scrap. I hadn't considered that it was already written off.

Speaking of articles that make your eyes glaze over, did anyone understand that last one in the Journal about being your own employee? Can this guy make things complicated or what? If I'm my own employee, I'm gonna ask myself for a nice big raise and nice comfy office..... and eh....oh yeah, and a sweet young thang to take dictation.....

[Go2Tex]

Yeah, I felt soooo much better after talking to a CPA this year. I was chasing my tail over a couple of record keeping/inventory issues that she was able to explain and I was then able to go back to doing what I do best, messing up leather and creating piles of scrap.