Full Version: Quickbooks payroll question
From: Engravin' Dave (DATAKES) [#4]
13 Jul 2006
To: UncleSteve [#3] 13 Jul 2006
From: UncleSteve [#5]
13 Jul 2006
To: Engravin' Dave (DATAKES) [#4] 13 Jul 2006
It was all Ken's fault (and the auditors.....) :'-(
Wanna buy an Arthur Andersen name badge cheap? ;-)
From: Cody (BOBTNAILER) [#6]
14 Jul 2006
To: UncleSteve [#3] 14 Jul 2006
Steve,
Wonderful explanation.
To answer your questions:
1) We are set up as a sole proprietorship.
2) I honestly have no preference regarding my title...doesn't matter.
That leaves only one question (for now) unanswered: How do you account for the estimated tax payments that you make to the IRS? Would it still go into a Payroll Tax account, as if it was for an employee?
We've gotten pretty good at accounting for our business over the last couple of years. I do all of the bookkeeping through the year, and my wife does the taxes. She's much better at her job than I am at mine! Since we use Quickbooks and TurboTax (both Intuit products), the information flow at tax time is virtually seamless. We've learned a great deal about our accounting process from the way that TurboTax sorts information...it's been a big help.
You're a big help! Thanks!!
Cody
From: Engravin' Dave (DATAKES) [#7]
14 Jul 2006
To: Cody (BOBTNAILER) [#6] 14 Jul 2006
Cody,
The Turbo Tax software seems to be a good program on the surface. Unless your wife is a CPA, I would recommend doing a comparison some time. Do it on Turbo Tax, then have a CPA do your taxes that same year. You might be surprised that you may be throwing money away in an effort to save some.
I used to do my own, but have found it much wiser to pay the professional.
EDITED: 14 Jul 2006 by DATAKES
From: Cody (BOBTNAILER) [#8]
14 Jul 2006
To: Engravin' Dave (DATAKES) [#7] 14 Jul 2006
David,
We seriously considered doing that this past tax year (her suggestion), mainly because our scope of work had expanded so much. She has done a wonderful job, and is meticulous about getting back every dime possible. In fact, she typically spends over a week on our return, running the numbers in different ways. The more stuff we add to our returns, the more nervous she is about doing it.
This year, I think we're going to go with a CPA. There's only one in our town that I really trust, and he's agreed to take us on as a client...even though he's not accepting any new ones these days.
I think it would be VERY worthwhile to do a cost/benefit comparison. Not only would we know that everything is right, but he can also shed some light on some of my accounting practices that may be less than perfect.
Good suggestion!
Cody
From: UncleSteve [#9]
14 Jul 2006
To: Cody (BOBTNAILER) [#6] 15 Jul 2006
Personally, I would suggest incorporating your company. The annual cost may be a bit higher up front, but the deductions and benefits should far outweigh the filing costs. Also, it will shield you from MOST (not all!) lawsuits that might crop up like the one for $25,000 for ruining a wedding cause you made a mistake or didn't deliver the gifts on time. :'-(
Also, the car/van you use for deliveries and picking up materials, the travel to trade shows including your fees, hotels,etc. are deductable from your income.
Your CPA will ask you for a quarterly P&L report which will be used to file any estimated taxes on your behalf...... If there is no income, you will be required to file a $0 return just to keep big brother happy.
Hope this helps a bit and your CPA should be able to handle the rest. If you are using Quickbooks, print out your chart of accounts, a YTD balance sheet and P&L to go over with him the first time.
From: Dave Jones (DAVERJ) [#10]
14 Jul 2006
To: Cody (BOBTNAILER) [#6] 15 Jul 2006
As a sole proprietor, the company is not a seperate entity. You are the company. The employees work for you. Everything sold by "the company" is your personal gross income and whatever is left after you deduct what you can is then your net taxable income.
With a corporation you and the others all work for the corporation. You can be paid like the rest and if anything is left at the end of the year then the corporation pays taxes on that.
The rules of what is deductable are very different for a sole proprietor than they are for a corporation. There are a lot of things that you might feel you should be able to deduct that in reality you can't deduct as a sole proprietorship.
It sounds like you really need to talk to an accountant ASAP.
From: Engravin' Dave (DATAKES) [#11]
14 Jul 2006
To: Dave Jones (DAVERJ) [#10] 15 Jul 2006
Most smaller businesses would set themselves up as an S corporation, rather than a C corporation, avoiding the corporate tax you are referring to. An S corpration would allow you the same limitations on personal liability, plus, if you are in the early stages of your business development and you have some losses, the S corporation structure will allow losses to be passed through to yourself, the shareholder, allowing you to use this loss to offset other income you may have had on your return.
EDITED: 14 Jul 2006 by DATAKES
From: UCONN Dave & Lynn too (DANDL48) [#12]
15 Jul 2006
To: Engravin' Dave (DATAKES) [#11] 15 Jul 2006
From: bobkat [#13]
15 Jul 2006
To: ALL
From: Engravin' Dave (DATAKES) [#14]
15 Jul 2006
To: UCONN Dave & Lynn too (DANDL48) [#12] 15 Jul 2006
Shhhhhh! There may be a politician lurking among us.
EDITED: 15 Jul 2006 by DATAKES