posted on December 23, 2000 10:00:57 PM
I would like to start the new year off right...could those who aren't power sellers..those who are basically just supplementing their income...please tell me if they use an accountant?
If so, why? Where are they (would you recommend them to a newbie)? Are they expensive?
Or would you just do your own taxes?
Also, any ideas on how to FIND a qualified accountant?
What questions to ask?
How do you USE an accountant? Ship him everything monthly...meet monthly..weekly...yearly...do they help you organize the items you should keep to document for taxes?
Thanks all!
Merry Christmas!
Carole
I have a WEB PAGE!finally!
http://pages.prodigy.net/carolereynolds/
posted on December 23, 2000 10:57:26 PM
I use an accountant to help with my taxes. He does my personal taxes, and my business taxes on a Schedule C. I only meet with him when it's time to do taxes, but I call occasionally during the year if I have a question.
Based on what he needs to do the taxes, I keep records during the year that will allow me to answer the questions he has at tax time. He walks me through office-in-home deductions, business use of the car, depreciation of office equipment, Social Security taxes (15% YIKES!), pre-payment of estimated taxes quarterly, and all that. I handle the sales tax reporting to my state by myself, because it's pretty straightforward.
I'd suggest starting with a good tax preparer, and see if that meets your needs.
posted on December 23, 2000 11:27:35 PM
Your question depends a great deal on how comfortable you are with the trappings of business. If you are very comfortable then possibly you just might want to seek some bookkeeping assistance with an accountant overseeing quarterly to make sure you're on the right track.
On the other hand, if you are business phobic then you should seek out as much assistance as you can to make sure you get started on the right track.
Don't start out putting yourself in a bad position which will likely get worse. Know your limitations and find help for the rest.
As a side note, if you start off using software such as Quickbooks your accountant will love you. If you're thorough and accurate in your entries then your outlay for very expensive accounting time will be minimal. Quickbooks can generate what they call an accountant's copy for records review. I used to be in the upper management of a $4million/year business. Quarterly we would generate the accountant's copy and email it to the accounting firm. He would review it and let us know if anything was amiss or if it was just fine. We never had more than 2 hours worth of billing time doing it this way.
If you've been doing well with Quickbooks then you can use software such as TurboTax to do all your preparation of taxes for you. There is a specific version of TurboTax available just for Sole Proprietors. It has lots of excellent information to help you understand business and will tailor the filing for small entrepreneurial businesses. It will also warn you if you're straying into an area where you might be audited for using incorrect deductions or making claims that cause red flags at the IRS. The version of the software I'm talking about is: TurboTax: Home and Business. It's made by Intuit, which also produces Quickbooks. Unfortunately, you don't normally find this version where you buy software. Software stores normally just carry the generic version. It's available from Intuit directly and at many mail order distributors.
posted on December 23, 2000 11:51:00 PM
avaloncourt
Thank you soooo much!
My hubby used Turbo tax last year for our taxes and he loved it.
There is a seperate one for home business?
Can this be purchased online? (we live in a very tiny town that I'm SURE won't have it..sigh).
I have been thinking of quicken..but I don't know what I should keep track of...any suggestions?
I mainly get my stuff at super sales in stores and garage sales...I'm looking to buy a cheap run around gas saving car for this...that would be deductble , wouldn't it?
Thanks a bunch...
I USED to be smart...but I feel so STUPID nowadays...it's so frustrating.
Could it be because I'm turning 50 in a month???YIKES!
posted on December 24, 2000 01:33:01 AM
No problem at all, Carole. I'm happy to help. Even a small home business can be overwhelming if you don't really know what all you should be doing.
Yes, that TurboTax version for sole proprietors is available directly from Intuity. You can get to the page with all of the information about that version at:
I really would recommend trying to use Quicken for business accounting. It's a handy electronic check register with budgeting and some investing functions but it doesn't have the capacity to handle most business functions. Keep in mind, even though you would be a sole proprietor, keep all of your finances separate. Never co-mingle your home finances with your business. If you ever have to face an audit it would be impossible to prove what was business and what was personal. That's about the time they fire up the kettles with the boiling oil and heat up the tar.
As a sole proprietor you really can't claim your a car itself as a business item as you could if you were incorporated. Being a sole proprietor just means you're an every day Joe (or in your case, Jane) doing business. The line between personal and business is very, very thin and the IRS has been having a field day with home office situations for the last few years. You can claim your vehicle use in two different ways to recoup a part of your expenses.
Just keep to the rule of thumb... everything must be separate. If you claim home office space, it can't be used for anything else. It must be your work area which doesn't happen to be the living room as well. It needs to be a place where it can be clearly defined that work is done. That becomes a percentage of your home and can then take a percentage of your electric, gas, etc.
I highly recommend you try to locate the S.C.O.R.E. office in your area. It's an agency of retired executives who help people with business questions and problems. Depending on the state where you reside they can operate in a couple different ways. They may charge a fee for seminars or mentoring assistance, or they may be heavily funded through your state and are required to provide a certain amount of services free of charge. I live in a city of 14,000 and there's a SCORE office here.
It's actually amazing how much assistance is available if you can manage to track it down. I was laid off from a job several years back and as I went on unemployment I began to think about having my own business. I had been thinking about it for years but never wanted to cut those apron strings and let go of the "security" of working for someone else.
As it turned out, the state profiled me to be assesed for a program. I was then given 1 year of unemployment compensation with no requirement that I seek a job during that time. It was actually recommended that I did not. I was then put through a 1 year business program at a fairly well known University with a very strong school of business. It was the best thing to ever happen to be. It started with an "E.Q." (Entrepreneurial Quotient) test which is a standardized test I never knew about. It determines if you have the mind-set to make business work and identifies strengths and weaknesses. As it turned out, I was the only one in the group that would have been considered by that test to be the profile of a successful entrepreneur. "Passing" was 75% and nobody else made it above 75. I ended up having a 96.
In the course of that program I became acquainted with all of the resources available around me that I never knew existed. The University was even funded by the state to have a small business assistance office on their campus and must provide free assistance to anyone who asked for it. In this state, that network of locations is called the Small Business Development Center. I'm sure most states would have something available.
The funny thing was the whole program I was put through was funded by Federal money for people who were displaced due to NAFTA. There must have been a huge definition of displaced because my layoff had nothing to do with NAFTA. That's the federal government at work.
It's not that you're stupid... you just aren't up to speed. If you want it to happen enough, it will.
posted on December 24, 2000 03:58:12 AM
Find a local accountant ...check your yellow pages or ask small businesses.
RENT the accountant for an hour REAL SOON to help you get your records set up - they should know what ones you need to keep.
If you just ship them the stuff, you are paying accountant's wages for data entry and paper shuffling. You have to keep your records straight for them to review.
Software is great ... get eBud and just use the spare columns for keeping track of item cost, and use its reports for figuring
http://www.nonags.com (the freeware side) has GREAT software for Windows computers, and might have a free accounting package. Quickbooks can be ordered online from various places.
The cost of the car is probably NOT deductable immediately, but gas, maintenance, and depreciation certainly is. Just don't use it for non-business things, or keep track of the mileagfe on non-business trips and you will be OK.
posted on December 24, 2000 06:56:53 AM
Well, we have and use Quicken and have Turbo Tax, but after almost 20 years of being self employed, and never an audit, I trust my final papers to be done by a CPA firm, who specializes in the self-employed.
In regards to the cost – it would depend on your tax situation – but we find this company VERY inexpensive. AND, they have saved us TONS of tax money over the years, can't ask for any more.
We have used this company for about 15 years, and wouldn't consider doing our taxes ourselves. We send our Quicken print out, via fax to our accountant who is 700 miles from us. They take care of everything, including State taxes and such. We first encountered this firm when we were with a major company in Ft. Wayne, Indiana, and they recommended this accounting firm as specialists in tax work for the self employed. When we left the Ft. Wayne company, even though we live in the Deep South, we continued to use this company and most likely will forever. We haven't personally seen them in 11 years, it is necessary.
We feel much more confident in having our tax return go in under the signature of this firm.
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