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Taxes, accountants, and all that jazz

by feejss
10 replies
I stated a few authority sites about four years ago and last year they started making a little money. This year I've already made about $25K and I estimate that I'll probably make another $6-$10K by the end of the year. Should I start looking into getting an accountant? I set aside 30% but I have a feeling I'm not doing something right. I'm afraid of screwing something up and getting in hot water with good ol' uncle sam.

Anyone have advice or experience with this?
#accountants #jazz #taxes
  • Profile picture of the author ryanbiddulph
    Go with your gut Hiring a pro will quell your fears, I say do it.
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    • Profile picture of the author feejss
      Originally Posted by ryanbiddulph View Post

      Go with your gut Hiring a pro will quell your fears, I say do it.
      Any idea how much I might pay?
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  • Profile picture of the author ryanbiddulph
    Nope, I do taxes myself, I don't fear Uncle Sam lol.....any other Warriors know?
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  • Profile picture of the author vishwa
    If you are unfamiliar with taxes then you can hire an accountant or a income tax lawyer.
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  • Profile picture of the author laurencewins
    Hiring an accountant is the best way to go. I have one even though my stuff is not complicated because I know that their tax return is usually accepted without question.
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  • Profile picture of the author mrclean0325
    Through hard experience, here is what I have found.

    First, pay your taxes quarterly. This way there is not the huge sticker shock at the end of the year with little time to get the funds before the penalties apply.

    Second, get a good accountant who is familiar with a home business. There are a ton of deductions (which change all the time) you can take. Someone who is up-to-date with all the new laws and rules is the one you want. Otherwise, you are leaving money on the table and paying too much in taxes. Doing taxes yourself is like being your own lawyer, it may not work out well in the end. They are worth the money and may also be a deduction.

    Finally, keep receipts for everything. Since what you could deduct last year may not be deductible this year and something may be added this year you couldn't deduct before - don't take any chances. It really sucks to find out about something you could have used to save yourself a few hundred and don't have a receipt for.
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    • Profile picture of the author kilgore
      Originally Posted by mrclean0325 View Post

      First, pay your taxes quarterly.

      Second, get a good accountant who is familiar with a home business. There are a ton of deductions (which change all the time) you can take.

      Finally, keep receipts for everything.
      This is great advice, and I agree with almost all of it. Getting an accountant can be a good idea whenever your tax situation changes significantly. They'll help you navigate things like self-employment tax and make sure you're deducting everything you can.

      That said, while I pay quarterly taxes because it's the law, and I don't want to incur penalties, I always pay the minimum required as I'd rather get interest on my money rather than giving it away (even if interest rates are pretty measly right now).

      I'd also mention that I've been self-employed on and off for over ten years and I've never had much issue doing my own taxes and accounting (along with the help of tax preparation/accounting software). Partly the depends on your own comfort level and background knowledge. You can always get an accountant for this year to get you on the right track and then decide whether it's worth it to you or not in the future.
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  • Profile picture of the author KenJ
    I am very biased as my daughter is an accountant with her own practice in the UK

    When I set up in business in 1989, I met with an accountant before I started my business. He had all sorts of knowledge that reduced my tax bills and other payments to a minimum for 3 or 4 years.

    So I would go and get an accountant. Then you can forget worrying about the tax man. All my letters from the UK inland revenue go to the accountant unopened. I let them deal with it. I concentrate on making money.

    KenJ
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  • Profile picture of the author David Hooper
    First of all, I'm not an accountant...

    You don't need to pay quarterly taxes if you don't mind paying a small penalty when you file on April 15th.

    Also, you may want to look at TurboTax Home and Business. Will let you do a Schedule C and help you go through all your deductions. This may be easier for you than going to an accountant.

    I also really like Shoeboxed.com (scanning service) to handle receipts. Worth $10-30/month as they organize everything.
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    • Profile picture of the author feejss
      Thanks everyone. I don't really have any expenses... I think I've spent about $100 total this year on hosting and a little FB and Reddit advertising. But, I think I might still get an accountant this first year. Or maybe I'll look into some of this tax software.

      Thanks!
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