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  • Tax Time....HELP?

    I was wondering if anyone could offer any advice for me about filing taxes. This will be my first year filing for my business, and I'm pretty nervous about it! I would appreciate anything anyone can offer!

  • #2
    Find an accountant to do the job for you.

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    • #3
      I have an accountant. That's my best advice.
      Accountants offer all levels of service, the level I chose is very basic....I keep track of all of my numbers,.... expenditures and income.
      He mails me a 9 page "worksheet" in December, and I simply fill in my numbers, mail it back, and viola....all my returns arrive 2 weeks later. All I need to do is sign, stamp and mail.

      It costs about 300 to 350, and he is a bit "upper end", but I can barter part of that with him. When I used something like H&R Block (providing them w/ the same tallied information) it was considerable less, like 175.

      It's the ONLY way I will do my taxes from now on. No muss, no fuss, no worry, no stress.
      Often it's not what you say, but how you say it.

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      • #4
        Yup and get yourself on QuickBooks. I have QuickBooks Simple. That makes it so much easier when you have to visit the accountant.
        www.gomobileandsucceed.com
        http://thesuccessfulpetgroomer.com

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        • #5
          I agree with the others. Get a tax professional to do your business taxes. You are much less likely to be audited, and will have peace knowing that everything got entered properly. They will also let you know if you forgot anything. I give my accountant a print out of all my income and expenses, listed by category. I'm home based so I can write off a portion of my home, which is GREAT!

          You may be able to do your own taxes in the future on turbo tax or something like that, but for the first year hire a professional.

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          • #6
            Sibes is right. An accountant can find deductions you would not know existed, and can identify problems in your record keeping that could get you in trouble with the IRS. Well worth the money spent, and even the accountant's fees are tax deductable.
            "With God's help, all things are possible!"
            Laura Lee Ray
            I am kats_melody on eGroomer. Follow my Twitter tweets - @ZOOMGROOM on Twitter.com

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            • #7
              you can take your info to hr block and they will do your taxes. they also have offices that will help you do estimated quarterly taxes, and bookkeeping if bookkeeping is not your thing. I worked there for the last five years and managed an office for last two. I loved doing small business returns.

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              • #8
                My first year in business I used my accountant and he cost me $625 just to do my taxes. I was a bit in shock, never thought it would cost that much. Hubby wants to attempt to do them this year. He went to college to become an accountant and figures with 2 1/2 years of school he can do them. I'm REALLY nervous about that but figure he can try, when he gets fed up I'll have a professional do them. Especially since I haven't even started to put all my bank info into quick books for the year. The checking account, payroll account and savings account all have to go in there. I get a knot in my stomach just thinking about it. Oh and all the cash receipts. All my client reciepts are already in there since I do those every 2 weeks now. I mean, I've got it all on paper, why can't the computer just read?????
                What a caterpillar considers the end of his world, we call a butterfly.

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                • #9
                  I use a CPA

                  truthfully it's in a big office and he oversees the work and signs off on it. It's only about $300. Same thing, I drop my numbers off and they say it's ready and they file it electronically. They set up what to send to the IRS and State including the dates to be mailed by and the envelopes addressed. I would not want to do it any other way, but partly because Math skills or organizing skills are not my nature.
                  Money will buy you a pretty good dog but it won't buy the wag of it's tail.

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                  • #10
                    Thanks for the help. I was planning on hiring someone to do my taxes, it is a family friend that works at a business similar to HR Block. She is not a CPA, but I know that she does taxes for some corp and small businesses in our area. I'm just wondering if there is anything particular that I need to know about to make sure she takes care of in order to do my taxes properly. That is what I'm most nervous about. I have my receipts, account statements, and various expenses from the previous year already organized.

                    I'm also quite nervous about how much I'll have to pay? Will I ever get a refund again? I used to look forward to getting a refund, even if it was small. Does anyone know what kind of percentage you have to pay on your profit from the year? I used to work at a bank, and we had many businesses come in a pay on their taxes quarterly...do I need to be setup like that? Does anyone know?

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                    • #11
                      Originally posted by prettymiss112000 View Post
                      Thanks for the help. I was planning on hiring someone to do my taxes, it is a family friend that works at a business similar to HR Block. She is not a CPA, but I know that she does taxes for some corp and small businesses in our area. I'm just wondering if there is anything particular that I need to know about to make sure she takes care of in order to do my taxes properly. That is what I'm most nervous about. I have my receipts, account statements, and various expenses from the previous year already organized.

                      I'm also quite nervous about how much I'll have to pay? Will I ever get a refund again? I used to look forward to getting a refund, even if it was small. Does anyone know what kind of percentage you have to pay on your profit from the year? I used to work at a bank, and we had many businesses come in a pay on their taxes quarterly...do I need to be setup like that? Does anyone know?
                      Your accountant, if he or she is knowledgeable about small business, will know. THAT'S who needs to give you the answer to your tax questions.
                      "With God's help, all things are possible!"
                      Laura Lee Ray
                      I am kats_melody on eGroomer. Follow my Twitter tweets - @ZOOMGROOM on Twitter.com

                      Comment


                      • #12
                        It depends on how much you make and your tax situation as to if you should file quarterly or not. I've done it both ways, depending on our situation at present. When I worked as a contractor, my tax guy told me to always put away 30 percent in the bank for taxes. Once he figured them out and I paid my taxes, I usually had a little bit left.

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                        • #13
                          Your tax return will less if you take in perfectly organized records. If they have to organize your records, well just like groomers, time is money.

                          Whether manual or computerized, your receipts for expenses paid by cash (not check) should be separate and coded with a description. Office supplies, filing fee or grooming supply etc. If not computerized, tally the receipts by category on a paper journal.

                          Checking statements. Did you balance the checking statement each month "reconcile" and balance perfectly? If computerized, print the reconciliation report and have a copy of the checking statements available.

                          Credit card statements. Did you balance every credit card statement? If you used your card for business and personal, identify every transaction and tally up the business ones so they can be coded (again, supplies, utilities, whatever). We cannot expect them to know what a charge is for so clearly identify.

                          Large purchases have to be described well because the purchase may be depreciated.

                          Business obligations. Did you obligate the business to loans, investors, notes payable, promissory notes? If so, the accountant needs copies to figure the principal and interest, and total obligation due for the balance sheet.

                          If you are a corp or llc there should be at least one annual meeting minutes and great CPA's always ask to see them, some don't. No big deal but you may be asked.

                          Leases, rent contracts, other contracts...CPA's may want to see them if there is a financial impact.

                          Retail inventory. Whether you have 10 items or 1000 items for sale, you are supposed to prepare a reconciliation of the inventory on hand at the close of your tax year.

                          So if all of the above was sorted into folders as backup to a manual or computerized and then handed to the accountant you can save money. You are also prepared for an audit should that happen, so rest easy. It's already organized and prepared instead of frightfully preparing for one. That's how you can save a lot of money. If I bring you a tangled mess dog and expect you to take more time to straighten the coat and style, you will charge me more. If I bring a tangled mess of paperwork to the accountant, I should expect to be charged more.

                          The best format when using outside help is to let a bookkeeper doing your monthly books and they will computerize your books and balance etc. The IRS actually expects you to do monthly books according to "generally accepted accounting principles." Then at the end of your tax year the bookkeeper gives you a digital file to take the accountant who can then swiftly prepare a tax return at minimum cost. Sometimes the accountant has bookkeepers on staff, just as an attorney may have a paralegal doing the basics to keep costs down for the clients.

                          More important why is it important to do your General Ledger financials MONTHLY and SUMMARIZED QUARTERLY. Estimated taxes!!! This is the big one that so many do wrong. If you are a sole proprietor you must determine quarterly how much ESTIMATED tax you owe so far for the year. That means you have to know how much profit you made in that quarter, and I am using easy terms here in general. Plus did you take personal draws for your living expenses. Well FICA Social Security taxes may be due and you don't wait for the annual return to pay those. The government LOVES CASH FLOW, they are not into waiting all year. So the best job a bookkeeper does is to say at the end of each quarter, you need to mail a check to the Fed and maybe state for this much as an estimate of what you owe for this past quarter, and there are cutoff dates, usually 15 days or so after the quarter closes. Then when you do your year end tax return and you finalize the offical tax bill, you deduct the estimated payments and pay the balance. If that balance is over $500 you may be charged penalties and interest for making insufficient estimated tax payments. This is the number one problem of perhaps over 1,000 of my groomer consultation clients at one time...and did you know that ALL IC's on 1099's are supposed to be doing this...it's news to most of them. Talk about learning the hard way. I just tell them if you cannot do it yourself groom 3 dogs a month and give that to the bookkeeper for monthly books and stay out of trouble. I have DOZENS of groomers with bills due to the IRS for $5,000, $10,000, $25,000 and some over $50,000 related to handling 1099's wrong, calling employees IC's and sole proprietors simply not paying in estimated taxes correctly.

                          I've also found that many groomers don't do their 1099's correct for non grooming labor expenses. You may have to report rent paid to your landlord and provide your landlord a 1099. 1099's are not only about IC groomers. If you pay someone more than $10 interest, there's another 1099, but that's not finance charges, interest is not finance charge etc. When you have to do 1099's is a complex subject, amount paid, company formats of the receiver are just a couple of the factors of when or not you have to file 1099's.

                          Keep in mind that tax returns prepared by very formal, respected CPA's are rarely audited. I've heard less than 2%.

                          P.S. CPA's become far more important if you make that decision to become a Corp or LLC. The 1120 corporation return is no easy thing! People often make mistakes on partnership returns too.
                          Most questions regarding GroomerTALK are answered in the Board Help Talk Forum. Thanks for coming to our community a part of PetGroomer.com https://www.petgroomer.com.

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                          • #14
                            Let me state this: I'm not a big business, I make just enough to cover my monthly expenses (with maybe just a little left over-my only source of income). My business is still very much in the growing stages. I'm home-based right now, so there is no retail or rent or loans or anything like that. I'm considered a sole proprietor, no LLCs or corps. I am quite familiar with accounting principles and keeping books (b/c I have an accounting background). I feel like I have kept pretty thorough records. There are no credit cards or anything to worry with. Everything is paid with cash or my debit card.

                            IMO, I can't afford to high a bookkeeper monthly or an expensive CPA to prepare my taxes b/c I don't have anyway to pay for it! My main concern is what to expect from filing my taxes this year b/c it is the first year I've been self-employed.

                            Stephen: Cool, so I suggest you go the IRS web site and download a Schedule C and a Schedule SE and a long form 1040. As a sole proprietor that is what you will need. Familiarize yourself with those forms, the C is a profit loss statement, right? The SE is just the government's way of getting double FICA SS from you since no employer donated their share, right? The bottom line of each goes onto a long form. SO, if you can add up all the receipts from cash and checks for expenses and assign those numbers to a C and then do your SE, well you are in good shape to pay the correct taxes. However, without some skill in "startup assets", which means most groomers forget that many of the expenses before you charged your first $ to a pet owner can be written off properly, including mileage to your school or whatever, well you might miss some writeoffs that a CPA or bookkeeper can find, but that doesn't mean you didn't pay enough taxes and you are safe. And you can download forms and booklets to learn about estimated tax, well, you have to because that is on the 1040 long form. So go download your forms and get familiar with them and you will be OK and work up to the point you can get some assistance as you grow.

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                            • #15
                              Turbo Tax offers a business edition and it's rated as very good.

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