It's tax time

[berkleystudios]

This is the first year my studio has been open and my first small business and I feel like I'm about to get destroyed by taxes. Any one else feel this way? And those of y'all with LLCs who do y'all uses for taxes? Not sure if this is something I want to DIY lol.

 

[ppa]

in Italy is normal to feel so, a lot of taxes,
just today the tv said on a new tax for the colf, and for summer VAT will be a 1% more and moreover another tax on garbage. Moreover just yesterday I known another tax on investment funds.
Italy is famous in the world for taxes. 
An USA LLC is my a dream! for the MUCH lower taxation,  just to be precise.


edit: forgotten to repeat: An USA LLC is my a dream! for the MUCH lower taxation than an italian LLC  ;D

 

[ruffrecords]

This is the first year my studio has been open and my first small business and I feel like I'm about to get destroyed by taxes. Any one else feel this way? And those of y'all with LLCs who do y'all uses for taxes? Not sure if this is something I want to DIY lol.

You need a good tax accountant. You would not put a tax accountant in charge of a recording session so don't put an engineer in charge of tax.

Cheers

Ian

 

[justanalogue]

Get a good accountant, they know exactly what's going on with tax laws etc....

Willem.

 

[ppa]

in Italy an tax accountant for a limited company is a must , there are so many fiscal laws over an italian limited company that an italian accountant keeps generally in range 2800 / 6000 euro year for it.

Just for having a reference a annual return declaration module of an UK limited is 4 times more little than an italian personal annual return declaration module, so you can imagine like is complicated the accountancy of an italian limited company.   


How much are the costs for accountancy per year for an UK limited and for an american LLC?

 

[Echo North]

It depends on how complex your situation is and how much you value your own time.  In the USA an LLC is really just a legal entity.  In the eyes of the IRS you're a sole proprietor.  The common tax software can/should handle this stuff.  Basically you need to complete a "Schedule C" form.

However, if you have more complicated stuff like an S-Corp, payroll, etc, then a tax account is well worth the cost.  They can also dig up ways get maximum tax credits.

Mike

 

[okgb]

In Canada  , as is likely for many countries , the Government is one of the largest employers
and they have allot of people working to get any money they gave you back , and pretend
on paper to offer help but have the same people making sure you never get the assistance in the first place
so without a  " legal team  "  the small guy gets buried  , sort of the takes money to make money and if ya don't got it ...........

 

[JohnRoberts]

Turbo tax for business will walk you through the tax return, including schedule C. If really uncomfortable you could get a professional to help you the first year, but generally bookkeeping isn't rocket science.

Hopefully you kept good records for revenue receipts and expenses. Turbo tax will suggest general accounting categories to calculate P/L.

Don't worry it will get worse in the years to come... at least you don't have 50 employees.  8)

JR

PS: Not to say I told you so, but the predictions came true and we just reported near zero economic growth (too close to call) for the last fiscal quarter. Trillions of pump priming won't help if the pump is broken, and well is being sucked dry by government borrowing and spending. As the politicians try to blame each other and previous administrations... They need to stop trying to help and get out of the way. At what point do they admit their plan isn't working... (rhetorical, they will never admit it).. This economy is the gift that keeps giving as politicians stretch this man-made crisis into another 4 year term, and call for more government spending (with more borrowed money). arghhhhh

 

[fazer]

A good accountant is like a therapist.  They know everything about your life and help you find out how to deal with it.

I was blessed with an older brother who is a CPA.  He knows more about my spending habits than he should but he sure is helpful at tax time.

Quickbooks or Quicken home and business and turbo tax all wok to sort your schedule C out. 

There is an accountant in town here that works with all the full time musicians.  I think she really like's music  and gives them a break but also gets them to save records and think ahead.    Its amazing how the right accountants can help you.  Like the right attorney.  Like a Therapist. 

 

[sodderboy]

Plus on the accountant.  Mine sed don't be a W2 employee but a W9 contractor.  That alone saved huge chunks of time and agg doing paperwork.  I consult when I need to and use TurboTax Biz and TT Personal programs to do my own tax form preparation.  The preparation is exactly the same, and you'll pay over $800 if you hand an accountant a wad of receipts, deposit slips, and CC statements.  I like the softwares because I can enter the data at my leisure.

And if you have the LLC for liability's sake, an accountant will tell you that you still want to have some simple  biz insurance because a good lawyer will still be able to sue through the "cloak" one way or another.
Mike

 

[Echo North]

And if you have the LLC for liability's sake, an accountant will tell you that you still want to have some simple  biz insurance because a good lawyer will still be able to sue through the "cloak" one way or another.

Great point.  It's also really not that expensive for fire/flood/earthquake insurance and a few million in liability.

Mike

 

[sr1200]

I always put aside about 20% of revenue for taxes plus about $3-500 for the accountant to do his thing.  Im an S corp so things are a little different, but yeah, JR is right, its not rocket science, but id still rather pay someone to take the heat if anything goes wrong.

 

[berkleystudios]

i think im going with turbo tax, i have been using them for a few years for my 1040EZ's and its always been smooth an fast. now i have another question, i know taxation this yer has been delayed, but does my business need to wait for the government to send me something? the city sent me tax stuff but i have seen nothing from the state or federal, and i have all my w2's some im trying to finish my taxes asap.

also, this is a partnership not sole sole proprietor. so will my personal taxes be filed separately from my business taxes?

dumbest thing i ever did was try and start a business while still in college  although i have learned more in the past 10 months than my 3 years for my degree  :

 

[pucho812]

I would get an accountant. Yeah it's extra money but i would rather have someone in case mistakes are made, etc, etc. That being said I have been using H&R block for years. I deal in in all kinds of tax forms plus get a w2 from a few different places around town, so much easier for me to have them(H&R block) sort out those things as they know all that stuff. Plus if anything goes wrong they are there to help sort out the wrong. It might not be rocket science but  I much rather leave it in the hands of someone who has done it way more then me.

 

[JohnRoberts]

Its a good idea to get professional help when first setting up...  I still like turbo-tax for their menu driven approach for after that.

I think you mentioned a partnership... (I really don't like partners... them and bosses, and letting anybody else own 51% of your business). Last time I had partners (3) we were a sub-chapter S corp, and used an accountant every year. After a few years I resigned over 3 of the 4 partners voting against me about an (IMO) key decision. They were pleased when I sold them my share back and they each ended up with 33% instead of only 25%... another year later they had 33% of nothing, actually they ended up on the hook with the IRS...  Sorry to veer..

Talk to an accountant at least the first year...

JR

PS: I will resist ranting about the State of Union speech, because it hasn't happened yet, while I have a very good idea of how it will go... After 4 years of a plan not working, more of the same... (more borrowing and stimulus program spending), Our problem isn't priming the pump, we need to fix the well.

 

[mulletchuck]

don't use turbotax.  use taxAct.    i used turbotax for about 5 years, and always questioned why the interview process they use was so short (took about 45 minutes to do my taxes).  my refunds were tiny or I had to pay a high tax bill.    I tried TaxACT, and the interview process was a good 5-6 hours.  waaaay more thorough, and my refunds either tripled or the tax bill was very low.    I will never use Turbotax again, because they dumb down the interview to get you thru it faster so the process seems easier.