Keeping Financial Records



Exactly - Once you start to claim part of your house as a business expense, your chance of getting audited goes up. I figure anyone from the IRS looking at my business tax return, seeing the profit margin and very few, by the book deductions, pretty much laughs and says "damn, this guy's a fool, he's definitely missing expenses and deductions here", and puts it in a pile labeled "great customers".

yeah, car is another huge audit flag.

I'll clarify that I *DO* write off my home office as a percentage of my house, however it's a small portion (150sq ft), and that's what most who don't actually write this off don't get.

If you have a 1,500 sq ft house and a 150 sq ft DEDICATED office you're writing expenses as 10% of things (rent/utilities/etc). Where people get stupid/creative (compliantly) is when they want to suck more than that away. Fun ways to do that are mixed use space where it's gray as to what's office and what's not (think a loft) and then claiming 70% is office.

I knew a guy who did this, had a sick place, and put various workstations and pieces of his business everywhere except for the master bedroom (the only thing walled off inside the loft) and was able to write off the vast majority of his place.

However this takes effort to do correctly, or risk to do and chance that nothing happens.

I'll leave my chancing to campaigns, and not with things related to the IRS.
 
Absolutely not. Just splits up your payments to govt, so you aren't stuck with paying major load at once.

If you are required to pay estimated taxes and fail to, you will be forced to pay a penalty.

Who Must Pay Estimated Tax
If you had a tax liability for 2008, you may have to pay estimated tax for 2009.
General Rule
You must pay estimated tax for 2009 if both of the following apply.

  1. You expect to owe at least $1,000 in tax for 2009 after subtracting your withholding and credits.
  2. You expect your withholding and credits to be less than the smaller of;
    • 90% of the tax to be shown on your 2009 tax return, or
    • 100% of the tax shown on your 2008 tax return. Your 2008 tax return must cover all 12 months.
Sole proprietors, partners, and S corporation shareholders - You generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return. Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay your estimated tax. For additional information, refer to Publication 505, Tax Withholding and Estimated Tax.
Corporations - You generally have to make estimated tax payments for your corporation if you expect it to owe tax of $500 or more when you file its return. Use Form 1120-W, Estimated Tax for Corporations (PDF), to figure the estimated tax. You must deposit the payments. For additional information, refer to Publication 542, Corporations.
Who Does Not Have To Pay Estimated Tax
If you receive salaries and wages, you can avoid having to pay estimated tax by asking your employer to take more tax out of your earnings. To do this, file a new Form W-4 (PDF) with your employer. There is a special line on Form W-4 for you to enter the additional amount you want your employer to withhold.
Estimated tax not required
You do not have to pay estimated tax for 2009 if you meet all three of the following conditions.

  • You have no tax liability for 2008
  • You were a US citizen or resident for the whole year
  • Your 2008 tax year covered a 12 month period
You had no tax liability for 2008 if your total tax was zero or you did not have to file an income tax return. For additional information on how to figure your estimated tax, refer to Publication 505, Tax Withholding and Estimated Tax.
Estimated tax requirements are different for farmers and fishermen. Publication 505, Tax Withholding and Estimated Tax, provides more information about these special estimated tax rules.


source: Estimated Taxes
 
What about keeping track of individual campaigns?

Do you guys enter in the profit and loss for every campaign every day into an Excel spreadsheet...or do you just keep an eye on things to make sure you have positive ROI for each campaign?
 
Get yourself a seperate bank account and amex card and it'll make things a lot easier. Get all made monies paid into the account and setup a standing order to pay you a wage into your personal account each month. When it comes tax time you should be able to give your accountant your bank and amex card statements, with notes attached stating what certian payments are for and he'll do the rest.