Forums: Discussions for entrepreneurs and small business.

I`ve recently gone ahead and established an LLC for myself for online sales that I do.  2007 will be my first year of actually running like a business in which I`ll need to pay all necessary taxes and what-not.

One thing that I immediately get confused about is how to handle filing everything at end of the year.  What I mean is, as an employee, I simply get a W2 from my employer which tells me exactly what amounts to fill in all the boxes on my 1040.  I`ve always used TurboTax for everything so it`s always been very simple.

Now though, how will I get that W2 for my own small business so that I know what to fill in on my 1040?  As that entirely up to me to keep accurate records so that I know exactly what I made for that, or am I required to have a CPA put that together for me?

I use Microsoft Money Home & Business and I`ve got reports that return everything I need...I think.  I`m just not sure if that`s acceptable when it comes to the IRS.

Any information on this would be greatly appreciated.  Thanks!

It would be foolish to attempt and do this on your own. You really should hire an accountant to handle all your tax issues. Although I`m not familiar with Microsoft Money Home and Business it is likely that it is sufficient for most home based businesses. Again consult with your accountant.

That said, as a business you will need to pay income taxes on a quarterly basis, you will need to file State sales taxes on a monthly basis, city or town taxes on a yearly basis and you will need to pay your personal taxes on a yearly basis.

If however, you insist on doing your taxes on a (basically) autodidactic basis and you don`t get all your questions answered here, these are other forums were you can ask tax related questions:

ABA Tax Net
http://mail.abanet.org/archives/aba-tax.html

April 15 Forum
http://april15forum.com/

The Motley Fool
http://boards.fool.com/Messages.asp?id=1040014000000000

MSN Money
 http://moneycentral.msn.com/community/message/board.asp?boar d=TaxCorner

LexisNexis
 http://community.lawyers.com/messageboards/board.asp?channel Id=19&mbId=36
(Business)
 http://community.lawyers.com/messageboards/board.asp?channel Id=19&mbId=43
(Personal)
 http://community.lawyers.com/messageboards/board.asp?channel Id=19&mbId=127
(Property)

AOL Tax Message Boards
 http://messageboards.aol.com/aol/en_us/boards.php
?boardId=538396&func=2&channel=Personal+Finance 

About.com
http://taxes.about.com/mpboards.htm?once=true&

Yahoo Message Boards
 http://messages.yahoo.com/Government_%26_Politics/forumview? bn=7701295

Findlaw.com
 http://boards.lp.findlaw.com/cgi-bin/WebX.fcgi?13@19.RP7oe7M bshW%5E0@.ee6b3e0

Good luck,

Ok, thanks for the info.  I`ll check out the links.

MS Money has reports that seem to give me exactly what I need.  I`ve gone in and organized all my transaction categories the way I need.  Then I can simply run the Schedule C report and it shows me exactly what I should put into all the boxes on the 1040 Schedule C.  I hadn`t seen that before I posted this thread.

Does that sound like it work for me?

You can`t replace nor can you spend an better money than hiring a CPA or good accountant to handle this for you.  They know of things you can deduct and ways to show a profit (or not) in order for you to have to pay taxes.  You will NEVER spend any better money on your business and they will keep you "out of trouble."  It sounds like you are very organized so it shouldn`t cost you a lot of hire someone to do it for you.  There`s a great saying from someone out there that says, "Do what you are good at and let those who are good at what they do, do them for you.  You won`t be sorry when you see how much money they can save you (probably their fee and then some)!

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Gail Alexander, CEO Setting the Stage

I`ll echo what`s already been said regarding the use of a good CPA or accountant. In our first month alone, using a CPA saved us roughly 5 figures...which paid for their fee & then some!

Don`t discount the worth that peace of mind can bring. Worry = drift, which is never a good thing. So if you can relieve some of your worry by handing off to a professional you trust, you can focus on the things that only you can do for your business.

As with any service provider tho...make sure you do a bit of due diligence. Check references & their credentials. Make sure they have a clean record with the state CPA board (if they claim to be a CPA). Obviously, someone with demonstrated expertise with your type of business is preferable.

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Christopher Rue MCSE, MCSAM / Black Warrior Technology, LLC / Solutions That Build Your Business

Ok.  All I`ve heard from anybody here and elsewhere is that I should just go ahead and get an accountant.  So, I`m not gonna play Mr. know-it-all here.  I`ll just go ahead and do that.

It`s just a little aggravating because with the combination of MS Money and TurboTax it seems like I should be able to handle it without much of the worry that having a CPA would relieve. 

What`s a guestimate on a basic range of CPA costs these days?

Costs will vary between a bookkeeping service and a CPA.  Even those costs will differ from professional to professional.

You might check into both professions in your area.  Call a few and see what the range of fees and services would be for what you need.

 

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I live in the Seattle area and my CPA charges between $175-$225 per quarter and I have one employee.  Year end his fee is about $600. and that`s to do both my personal and business taxes.  He has saved me much more than  that over the years because he keeps up to date on all the tax laws and is aggressive, which I like.  Don`t forget that your business taxes have to be filed in March not in April.

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Gail Alexander, CEO Setting the Stage

I`m an accountant in Central Florida. I`m not a CPA. I appreciate how many times others in this topic have said "a CPA or an accountant." So many people think they HAVE to have a CPA. Or they think they are the same thing. I don`t charge as much as a CPA does for two reasons. One is that I`m a home based business and I don`t have the overhead of an outside office. Another is that I don`t have that CPA credential. But, I`ve been preparing taxes and doing accounting for 30 years. When I started, I had a high school diploma and I had taken every business course my high school offered. I worked for other companies, learning as I went, for about 15 years. Then, my kids were little and I wanted to be home with them. I started working from home and have done very well. Once people meet me, they know they can trust me. I have a very good word-of-mouth reputation.

What I`m trying to say (sorry about rambling) is that you should be fine with an accountant that has good tax experience (I would be a good choice!). And you will spend less money. I have clients that I have refered to a CPA (a good friend of mine) when I know they need it. But you don`t always need one.

Last, I just want to emphatically restate what others have said here. Don`t try to do the taxes yourself. The problem mainly is that you don`t know what you don`t know. I`ve spent years doing taxes and attended endless seminars to educate myself on all the tax law changes. You should do what you do, and let someone who does taxes do your taxes. Money VERY well spent.

Pat Palmer

Accutrack Business Solutions

Working with You to Keep Your Organization on Track

pat@accutrackbusiness.com

407-957-4140

 

“A taxpayer is someone who works for the federal government but who doesn`t have to take a civil service examination.”           - Ronald Reagan, US President

 

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Pat Palmer
Accutrack Business Solutions
Working with You to Keep Your Organization on Track
407-957-4140