EP and taxes....

[apamburn]

So...

I assume most of the work you all get is contractual. Do you therefore file as contractors and you have to set aside your own tax money? how does that work? Also, do you have to have a business license to operate as contractors?

Also, from what I understand from my mother (an accountant in VA), any expenses on uniforms, equipment, cleaning, etc...necessary for work are tax deductible. So if Armed Security was my employ, I could include training, ammunition, gun parts, and other gear as tax deductible expenses. Is it the same for EP work? Or do you just let your accountant do it for you? ;)

have you all found that to be true in your (collective) experience?

[Lone Wolf]

I have written off almost everything you can imagine.. I do my own withholding (which takes a high degree of diligence) I write of mileage suits uniforms firearms ammo training range fees I even wrote off my car.. In that it is used specifically for work... Even hair cuts.. So on.. Anyway Hope this helps.

Next word is yes I have been audited and they were like ok you are good to go.. Just have to be able to prove what you are using as deductions...

[SonnyPI]

First off, do not come to an EP site for legal or financial advice. Do you ask your accountant how to handle advance [rehtorical] work.
Always check with reputable, licensed professionals in your state of residence regarding LEGAL or TAX advice. Give them the details of ALL your income producing sources and let them prepare the best plan to CYA, and lessen any tax burden.
Cordially, Sonny

[Local Talent]

Sonny is right, of course and as usual. :) People often ask on anonymous online boards questions that would be better left to professionals. Now personally, I don't think there's anything wrong with that as long as the poster is just looking for pointers. Confirmation can always come later from the appropriate sources once he has narrowed them down. Sometimes we don't know where to start.

So... operating on the assumption that apamburn knows to follow up with his own due diligence (which I'm sure he does), that my advice is for California, and that I am neither an attorney nor an accountant, here it is:

No, I wouldn't say that most of the work is contracted. I'm currently working as an employee of an EP company, for example. There's plenty in LA and throughout the US. A lot of us end up working as employees OR contractors depending on the circumstances. Last year, most of my income was from 1099 work. This year, I'll probably be employed, and next, I'm hoping to be completely independent, but who knows?

One can either work for a company as a subcontractor or offer one's services directly to clients (one can also be employed by one client, but that's another story). In both cases, one needs a PPO license (discussed elsewhere on the forum) at the very minimum. Companies asking employees to work as "independent contractors" (1099) without PPOs are getting around labor and tax laws, and liable if caught.
See: http://www.bsis.ca.gov/customer_service/faqs/peace_officer.shtml
"A security guard may not act as an independent contractor to provide security services. A security guard must be employed as an employee of either a PPO, or the person, or business for whom the guard is providing security services."

If self-employed (subbing or working one's own contracts), one is responsible for paying all his fiscal and social contributions himself (an employer would cover half of your tax liability). That's done quarterly, and one has to estimate how much the tax ("withholding") will be. And yes, that means that one has to set aside the funds in advance and every 3 months - employees don't have to because the money is taken directly out of every paycheck. See: http://www.irs.gov/businesses/small/article/0,,id=110413,00.html

As far as business expenses, they have to be work-related as noted, and within reason. Keep all receipts! And the more one deducts, the more one exposes himself to a potential audit, which is never fun. And once on the IRS radar...
http://www.irs.gov/businesses/small/article/0,,id=109807,00.html

As Sonny advised, when about ready to take the plunge, it's best to consult with at least a tax pro, and maybe a business consultant, but I hope this gives you a clearer view.

[apamburn]

I asked out of curiosity. I may be young but I am not stupid enough to run out and start deducting everything I buy just because I read that I could on an online forum. But thanks for the reminder.

Thanks for everyone's responses. I know that training and equipment can be quite expensive, which is why I asked.

[Local Talent]

Reading your OP again, I just want to add that to be self-employed one generally needs a local business license on top of the professional licensing required (for EP: PPO & guard card at the very least, and likely exposed firearms permit and CCW). Depending on where the business is based, it can be a county or city license. Some homework will determine the localities where the fees and red tape are minimal - some cities don't even require a business license.
There will also be insurance requirements.

[Geo]

As I have said in the past regarding the business aspect of this career. I have a great law firm that I pay a yearly retainer. Many people think I am overprotective and a bit neurotic. It has been some of those same assclowns who decided to pummel a potential threat without the proper backing. Now those high paying independent contractors are working guard shack duties making $12.00 an hour. As for write offs, receipts etc in the EP business. Again you get what you pay for with a great accountant. My guy keeps my off duty stuff well documented on a monthly basis. It also helps that he worked for the IRS for 20 years. All the best Geo

[Local Talent]

It has been some of those same assclowns who decided to pummel a potential threat without the proper backing. Now those high paying independent contractors are working guard shack duties making $12.00 an hour.
Classic!

There's no such thing as "too prepared"...

[Lone Wolf]

[QUOTE=Local Talent;2962]Originally Posted by Geo
It has been some of those same assclowns who decided to pummel a potential threat without the proper backing. Now those high paying independent contractors are working guard shack duties making $12.00 an hour.QUOTE]

They make that much out there??? WOW Ill be looking at moving tomorrow morning.. They economy has absolutely driven wages for this profession down...

[Geo]

Hey Wolf,
My piece that I wrote was showing that a few very high paid ep guys who used to make 6 figures a year did not protect themselves from litigation. Due to that now most companies will not hire them. If they are hired again it is usually a guard shack job making crap money. The company that I do off duty for starts at $27.00 an hr (unarmed) and $36.00 armed. Which is not bad.. Geo