Define out of pocket.

Front or side pockets only.  NOT cargo pockets.

OH!  And not those zipper pockets they used to have on the Kangaroo sneakers, or whatever they were called...

[quote=peanutbroker]I expect expenses for the year (non reimbursable) to approach $12K -$15k for the year. How much is everyone spending out of pocket per year? Which firm do you work for? How much are you making? I have found that out of pocket expenses as an employee (rather than owning) of a firm to be a bit ridiculous. Getting a reduced payout and paying thousands of dollars a year unfair. [/quote]

Yep.

Define out of pocket.

peanutbroker:

 
things you spend your money on for your job and you do not get reimbursed. For example: mileage, telephone, misc office expenses, office equipment.

-----------------------------------------

Actually, mileage deductions are one of the best deductions around, if you drive an economical car. It costs me between .05-.10 cents/mile to drive my car and as of the end of last year, I could deduct .43 cents/mile. That means .33 cents of earned taxable income, per mile driven, is sheltered from income taxes. Drive 30,000 business miles per year and $9,900 of your taxable earnings are sheltered from income taxes. In other words, $3,000 in annual out-of-pocket business mileage expenses shelter nearly $10,000 in earnings from income taxes.

[quote=peanutbroker]I expect expenses for the year (non reimbursable) to approach $12K -$15k for the year. How much is everyone spending out of pocket per year? Which firm do you work for? How much are you making? I have found that out of pocket expenses as an employee (rather than owning) of a firm to be a bit ridiculous. Getting a reduced payout and paying thousands of dollars a year unfair. [/quote]

It is insane isn’t it?  Yet the wirehouse guys don’t seem to get this is one of the nicer benefits of being indy.

Don’t forget the 40 dollar kicker for phones over the past few years. Entertainment also is a nice expense. For sure mileage is great!

Peanut,

Don't forget that you can't even deduct the 1st 2% of your expenses.  If you make $100k/yr, your first $2k of expenses are not deductible.  In may case, AMT kicked in too.  Now that I'm Indy, all the deductions come out of the biz before they get to my return...no 2% floor or AMT.

My expenses average right at $4K/month for everything but my salary.  Gross will come in around $225K and I clear about 86% of that from my B/D.

[quote=uwec86]

Peanut,

Don't forget that you can't even deduct the 1st 2% of your expenses.  If you make $100k/yr, your first $2k of expenses are not deductible.  In may case, AMT kicked in too.  Now that I'm Indy, all the deductions come out of the biz before they get to my return...no 2% floor or AMT.

[/quote]

Not accurate. It's 2% of AGI, not the first 2% of the expenses.

Another reason Indy is so much better than Jones. At Jones I was splitting the phone bill, splitting the postage (of which there was plenty since I mailed out my own confirms), and supplying the office. And yes, they were only deductible after those expenses exceeded 2% of AGI. As Indyone said, everything runs through my business account.

FYI, at Jones you are reimbursed 100% postage for all confirms generated.  All copier paper and toner is free.  Telephone bill is how much, $50/month?  $25 after split?  C'mon.

Once you get on the Business Expense plan, they deduct the out of pocket expenses from your gross pay (paycheck gross) so they are 100% tax deductible.  I had that at my last company, too.

I don't need to spend more than a few hundred a month on expenses (unless I do large marketing compaign, etc. - and those are mass mailed and subsidized by home office). 

There really is not much that you pay for at Jones that you don't pay for at a wirehouse.  Indy is difficult to compare as it totally depends on the individual situation, payout, overhead, support staff,etc.  Last time I checked, admin staff was not free.

Last time I checked, admin staff was not free

Not really "free" at Jones either since the cost of your BOA and her/his health insurance and other benefits are deducted from your profit and loss.  You don't have a choice in how much to pay or whether your BOA is full or part time.

You are right however, it is not easy to compare EDJ to truly independent since we are all so different in how we run our practices.  HOWEVER, spending the same out of pocket costs as an indy vs Jones, I am thousands dollars ahead.

do u guys write expenses in ur schedule c{being single member llc/sole proprietor} or r u guys s corp …for abt 200k projected gross for year and with no employees which would be better,?

jeno,

First, easy on the “web speak” or whatever you call that internet

shorthand. We write in real sentences here.



I work for Jones, and I would honestly say, that for an established practice

that is not going crazy with overhead, you probably take home more with

Indy. Of course, it does depend on your product mix, your AUM, and a

few other variables. At Jones, really successful brokers make a ton due to

the bonus structure (I’m talking over 100MM AUM and/or 500K+ gross).



Again, depends on a lot of things. But I would guess that at 200K gross,

you will take home more being Indy. Again, depends on your overhead.

If you are a little shop with no support staff and cheap rent, 200K gross

will go a long way. At Jones, your W2 gross would be around 70-75K

(including deductions for phone, stamps, etc.).



Sort of beside the point, but one thing I notice at Jones is that brokers

don’t pay much attention to ROA. Our ROA is probably one of the lowest

in the industry. It is higher for those of us that know what we are doing

(not that I consider myself truly successful yet, but I know my own

formula for getting better ROA).

All you little indies are getting so giddy about deducting mileage.  Go waste you time driving all over so you can sit at Mrs. Smith's breakfast table and try to peddle her some unnecessary insurance.

Wirehouse guys have all our wealthy clients come to us in our beautiful glass buildings.

[quote=Lex123]

All you little indies are getting so giddy about deducting mileage.  Go waste you time driving all over so you can sit at Mrs. Smith's breakfast table and try to peddle her some unnecessary insurance.

Wirehouse guys have all our wealthy clients come to us in our beautiful glass buildings.

[/quote]

You have to DRIVE the miles to deduct them?

[quote=Lex123]All you little indies are getting so giddy about deducting mileage.  Go waste you time driving all over so you can sit at Mrs. Smith’s breakfast table and try to peddle her some unnecessary insurance.

Wirehouse guys have all our wealthy clients come to us in our beautiful glass buildings.[/quote]

Oh get over yourself.

[quote=My Inner Child][quote=Lex123]

All you little indies are getting so giddy about deducting mileage.  Go waste you time driving all over so you can sit at Mrs. Smith's breakfast table and try to peddle her some unnecessary insurance.

Wirehouse guys have all our wealthy clients come to us in our beautiful glass buildings.

[/quote]

You have to DRIVE the miles to deduct them?