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how can i learn to do my own taxes?

post #1 of 21
Thread Starter 
I always use taxact software and I have been a sahm but now I have a little income but we spent a lot of money and haven't made that back yet for me to be legal. I only sold about $12000, but most of that money went back into the business and I had to buy supplies. I know I gotta pay sales taxes on it, but I don't know how to itemize and dededuct. And do the other taxes. We spent $30,000 to be legal and buy cakepans and oven and sink and stuff because we had to have a commercial kitchen but I got small kids so I needed to be close to them plus we been having snow days. I know I can go to a accountant but I want to learn myself.
post #2 of 21
Thread Starter 
And I gotta learn fast! I want to do them in the next few weeks. I just have a lot of receipts in a box please help me because there are no receipts for my biggest things I bought because I was getting a lot of stuff used and already had some stuff and my grandma gave me some of her cake pans plus there is supplies like cake mix and oil and eggs and powdered sugar but other stuff like airbrush and and cabinets and cooling rack and tile and insulation. But I got some insulation off craigslist so I don't have a receipt.
post #3 of 21
Thread Starter 
Sorry for so many posts but I am using my phone and it wont let me see what I am typing wonce I get past a certain amount of lines. But my husband lost some receipts to and some got mixed up but I can remember what I paid for stuff before taxes plus you can find it online, so can I add it in and do a educated guess to what some stuff was that we spent?
post #4 of 21

I sincerely suggest that you see a tax consultant/preparer the first time around (get a CPA). They can give you advice on how to setup tracking things the right way so you can be more independent in the future with self preparation. If you've spent that much on start-up another $500-$1000 is a drop in the bucket compared to the invaluable advice you will receive if you don't know where to start (and the fees are tax deductible). You can read books and articles, but you need something more specific to your needs if you've never done your taxes with your business taken into account unless you are really familiar with the tax code and interpreting the law. Additionally minimizing your tax liability is something you need to keep in mind, and a CPA can help with that also. 

 

To give you some background, I went to business school (MBA) took a couple of courses in Tax Accounting and I still think the use of a CPA was the best idea ever.  I've prepared my own taxes since I've been paying taxes until I became a business owner. 

 

Here's a good article from my CPA http://mycpajay.wordpress.com/2013/02/19/to-err-is-human-to-deduct-divine/

 

I know that's not the advice you were looking for, but I think it is your best bet!

post #5 of 21
Quote:
Originally Posted by tdovewings View Post

I sincerely suggest that you see a tax consultant/preparer the first time around (get a CPA).

Agreed. If you were thinking of starting a business and you had some time to learn about doing your taxes I would recommend taking a class, but this is not the kind of thing you can learn quickly starting from scratch, especially if you have not been keeping diligent records.

I also went to business school for my MBA and took some tax accounting courses. When I started up my business I used QuickBooks to handle the accounting and track expenses/income. The hardest part was the initial QB setup, once you have it ready to go it's pretty easy to enter your receipts and orders. Doing the business taxes was relatively straightforward, you can import data from QB directly into Turbotax so it took me less than an hour to complete.

For next year, I recommend an accounting 101 class if you don't already have the background, plus a class specific to tax accounting and a tutorial class on your accounting software of choice.
post #6 of 21

the biggest problem is that you don't know what you need

 

it's one of those--you don't know what you don't know

 

you would have to learn everything in order to filter down to what would be pertinent for you--exhausting

 

you really need to bite the business tax preparer bullet at a minimum and a cpa of course is better srsly

 

you need to protect your investment

one baker's never ever do is the next baker's 'i swear by this'
 
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one baker's never ever do is the next baker's 'i swear by this'
 
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post #7 of 21
Thread Starter 
I don't have the money right now for $500-$1000! Is that really what it costs? That is actually much worse than I thought. I am really good at math and following directions and I double check all my math. I seriously don't have it. I do think I will probably not owe much if anything.because we are still considered low income even though I am trying. We have a household size of 6 and we normally get like $8,000 back every year. We got student loans and mortgage interest. How do I even find someone reputable? Can I ask how much it costs before I go in? I did talk to one that was really nice q couple years ago and it was a free consultation and when I asked him how much it would be he didn't tell me.
post #8 of 21

even an h&r block--they have a premium/business division for more complicated returns like yours--you can get it all roughly priced out in advance too--it's priced according to how many different forms you/they use--it might not be as much as you say--i don't think it would be--you can try them

 

maybe you could find someone (prolly not h&r though) who would take it on and get paid out of your refund

 

i'm not positive about that but it's maybe

 

who else will know all the ins & outs--not me for sure--i need pros for that

 

my brain can't hold that info--small r.a.m.--needs memory upgrade--and the busses don't run on time either icon_biggrin.gif

one baker's never ever do is the next baker's 'i swear by this'
 
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one baker's never ever do is the next baker's 'i swear by this'
 
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post #9 of 21
Quote:
Originally Posted by annabananana View Post

I don't have the money right now for $500-$1000! Is that really what it costs? That is actually much worse than I thought. I am really good at math and following directions and I double check all my math. I seriously don't have it. I do think I will probably not owe much if anything.because we are still considered low income even though I am trying. We have a household size of 6 and we normally get like $8,000 back every year. We got student loans and mortgage interest. How do I even find someone reputable? Can I ask how much it costs before I go in? I did talk to one that was really nice q couple years ago and it was a free consultation and when I asked him how much it would be he didn't tell me.

 

I don't know what area you are in, but in the Northern VA area most CPAs start at ~$200-$275 per hour. I didn't call every office when I was looking for one, just asked friends for recommendations and I called about 4 places and they all seemed to be about the same. I didn't even try HR Block or Liberty Tax because I wanted consulting services as well as getting my taxes done. 

post #10 of 21

Turbo tax is great for doing taxes even for business. It asks you simple questions and has drop down menus if you need greater clarification. I've used it for a property management consulting firm and independent tax collectors position. It makes depreciation and other complicated issues easy. It also pulls all of the depreciation information over for the next year so you don't have to recalculate.

 

When I have several items I need track, I use excel spreedsheets so I have the backup documentation for the entries. Turbo tax puts all of the information into the appropriate forms for you and then provides detailed worksheets to support the entries in your tax forms. It will also compare previous years' activities to the current one. They also have great customer service.

post #11 of 21
Quote:
Originally Posted by annabananana View Post

I don't have the money right now for $500-$1000! Is that really what it costs? That is actually much worse than I thought. I am really good at math and following directions and I double check all my math.

There actually isn't a whole lot of math involved in accounting, the software handles most of it.

I don't mean to be harsh, but it is critical to have your books set up correctly...if you don't know how to do it yourself and can't afford to hire someone to do it the right way you may want to put your business on hold until you have saved enough.
post #12 of 21
Sorry, misspoke! I replied in first person because I am going trough the exact same thing and it really pissed me off! Took it a little too close to heart!

OP, I know exactly what you are going through, I am going to send you a PM.
Beginners, be sure to parrot advice and get your post count up as fast as you can. After all, it's not what you know, it's what people THINK you know.
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Beginners, be sure to parrot advice and get your post count up as fast as you can. After all, it's not what you know, it's what people THINK you know.
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post #13 of 21

(BREATH!) Yeah, I am going through the same thing, and I am going to try Turbo tax, and see what happens. I had to replace a car, then a furnace, and it set us back over $10,000, after not getting child support in 9 months. I made $12,000 in the first 5 months last year, and then it has trickled in, sometimes $1000 in a week, and sometimes a $44 week. Times are tight for a lot of people, but rather than putting our businesses on hold, we strap ourselves in and hunker down and work hard   I know a little, not to give any advice on taxes, but some CC and business advice would be to ignore the nay-sayers, there are some rather hateful nasty people on here.

 

DEFINETLY get help on your taxes this time, even if you have to wait a month, or two, you can file an extension, if it comes to that. But the IRS has never gotten mad when people take too long to get their rebate, lol. just when they have to pay.

Beginners, be sure to parrot advice and get your post count up as fast as you can. After all, it's not what you know, it's what people THINK you know.
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Beginners, be sure to parrot advice and get your post count up as fast as you can. After all, it's not what you know, it's what people THINK you know.
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post #14 of 21

I have been doing my own taxes for over 40 years taught to me by my brother who was a CPA before he passed away, have taken accounting courses because my major was was business management and finance and I still went to a CPA when I started my business and had to file.  It's easier than messing up and getting audited. I wouldn't take a chance.

post #15 of 21
To clarify, I suggested putting the business on hold until OP can afford to hire a CPA to minimize the potential damage from an audit, since it's obviously too late to put off launching the business. The essential components of running a business (accounting, legal compliance, and insurance) should be budgeted for before you launch the business, and if you can't afford those essential services you probably shouldn't be running a business.

As an analogy, it might not be the best idea to buy a car if you can't afford to pay for registration fees, auto insurance, and routine maintenance.

If you end up doing your taxes yourself, be as conservative as possible. If you don't have the receipt for a business expense, don't deduct it. If you're not 100% sure an expense is deductible, don't deduct it.
Edited by jason_kraft - 3/1/13 at 10:57am
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