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Old 12-15-2017, 11:29 AM
 
1,045 posts, read 683,753 times
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I'm launching a small ecommerce business. For now this will be run out of my home, though I am considering getting a small office. I'm trying to get a ballpark idea of what an accountant might cost. Normally I just do my taxes with turbotax, and I'd even consider using turbotax small business.. But there are a few things I want to take advantage of that I'd really like an experts opinion. Like selling my SUV to the business so my payments are made pre-tax. Is the home office deduction worth it or too much of a redflag even if totally legit. Writing off trips, gas, other expenses.. Not just what I did for the year, but what can I take advantage of in the future. You don't know what you don't know.

Trying to get an idea of what I can expect to pay. Sales are light to start as it takes time to get a good footprint on google, I'm hoping to do about $100,000+ in 2018. Simple buying and selling.
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Old 12-16-2017, 01:34 AM
 
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$500-$1000
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Old 12-18-2017, 07:40 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
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When I started my business in 1993 I hired an accountant. Back then it cost me $90/month, another $600 at year-end to do the taxes. After that first year I fired him and took it over myself, for the next 17 years. I used Turbotax business, the only part I needed to learn a lot about was payroll, with 2-4 employees. The last few years I moved the business to my home and deducted a percentage of the mortgage, and utilities with a dedicated space. The IRS never bothered me about it. I doubt they would question a return showing only $100k revenue, since only 2.5% of small businesses are audited, and they will go for the low hanging fruit that has the best potential for a big fine/back tax payment.
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Old 12-18-2017, 04:49 PM
 
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I got audited last year, so it happens. The big, bad random research audit where they verify every transaction. We were working out of the house that year that was audited so part of the audit was to go see the house. The auditor came to our place of work and worked there several days over 3-4 months. Not our fault, just the luck of the draw, they say.

I have never used an accountant, just TurboTax. That was fine with the IRS. In fact, I didn't make any mistakes and had the necessary documentation for everything. Your questions are easily found by looking on the IRS site or googling. I really don't think accountants know much about home based businesses anyway, they are used to larger companies.

BTW, we did NOT ever take the home office deduction when we owned our home because there is a recapture tax when you sell, just didn't want to ever deal with that. So we weren't flagged for the audit for that reason. Just lucky.
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Old 12-24-2017, 10:32 AM
 
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It really depends on what they are doing, how well you maintain your records, and to what degree they are relying on your support. I'm a CPA that does a lot of tax planning (and subsequent compliance) for closely held businesses.

There is a benefit to having someone who is familiar with laws/rules handle your accounting and tax issues. In some cases where your situation is relatively consistent, as commented above, there is still a benefit to outsourcing this work as the opportunity cost could be greater for doing it yourself.

A perfect example is it may cost you $1,500 dollars to have someone prepare your taxes, and calculate estimated taxes for you during the year, but it reduces the risk of errors, maximizes the chances that you are minimizing your taxes, and frees up valuable time for you as an entrepreneur.

I think most specialty services (accounting, law, marketing, etc.). are not so complex that a reasonably intelligent person can't figure them out. They just don't have the time and experience to do so efficiently.
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Old 01-01-2018, 06:59 AM
 
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i am starting my business, and when i ve made [url=https://www.ogscapital.com/article/baby-clothes-business-plan/5]baby boutique business plan[/url] and i have found one worker for 1,3 per month. it isnt very cheap but i think i nead it, and my friend said he is very good
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Old 01-01-2018, 07:56 AM
 
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Congrats! I wish you much success! You are taking a big step many are too afraid of taking. Love having our own business, and control of our future. We tried retiring, I was early 40's, hubs early 50's. Lasted 4 months. Thank God we hadn't sold our business. Once you find what you lvoe to do, it doens't fell like work.

Yes, you are right. None of us know what we don't know.

First thing you need is Quickbooks. Take the week long class offered in several large cities and do your own bookkeeping (BK).
Its not that hard, the software makes it fairly easy once you learn where things are. You might eventually need a book keeper, but you should know how to do this anyway.

DO NOT ALLOW ANYONE TO SIGN CHECKS BUT YOU! EVEN YOUR BOOK KEEPER OR ACCOUNTANT SHOULD NOT SIGN CHECKS. Trust me doing it this way will stop all kind of problems before they even arise. To hire an accountant, we don't have one full time. If we have a issue, our CPA sends one out, to close out the year etc. But that would be over kill for us.
Our business 'inventory' is different than most.

$100,000 per year, you can easily do your books in off hours.

It would be worth it to you to make a list of questions and then meet with a CPA. That will keep the price down. Our CPA charges $250.00 per hour. Around $3,000 to do our taxes. But they are sort of complicated.

With the tax laws changing, CPS's are trying to get on board with how the new laws apply. So they aren't up to speeds yet.

We have a warehouse in another state, and have 1/3 of our home as our business. Large house. Its been this way since 2008. Never been audited. However our CPA works for the IRS auditting other CPA's tax returns. So she's very conservative with the writeoffs.

We don't have people come here unless they work here. We use alot of outside businesses. Our manufacturing is done at our warehouse. We rarely sell retail.

If you don't need an office, why have one? Yes you need one if you have clients come over. Although I know several RE agents, investment people, attorney's, etc. who work out of their homes.

I will say when or if you get a tax letter, act on it immediatley. The first letter you get, behind it is usually some lower level 'tax person' who doesn't know all the laws. We give the letter to the CPA, she talks them through why she did what she did and problem solved. I'd say in 47 years of business, we have gotten maybe 4 letters. And they all were handled by more explaination from the CPA. DO NOT IGNORE THE IRS. THEY ARE VERY REASONABLE IF YOU RESPOND RIGHT WAY. This is their motto - we will NOT be ignored. I know a couple family businesses that were ruined (and they were doing things illegally) by ignorng the IRS. I might say hey can we do this and CPA is like, NO you aren't! We are creative people in a creative business, not accountants. So she keeps us out of trouble.

Our CPA forces us to take the home office deduction.
Our house is paid for, we will be here the rest of our lives as we are older. She said if we didn't take it the IRS would say we did so they'd 'charge' us anyway. Might depend on how much your income is. We are older and our heirs will inherit the home and revenue stream. Our CPA might be dead by the time our heirs inherit so they'll assume things. She is no spring chicken either.

Now regarding the car. Our business bought my husband's car brand new. Luxury Lexus. However, we still need to keep track of every mile he uses for work. (And gas, maintence etc.) He does not use it entirely for work, so he's 'charged' for his use. As income. I use it for appointments too.

You might be ahead by taking the milegae deduction. Another thing your accountant visit can tell you. I will will say for the last maybe 12 years, the IRS has gotten stricter and stricter every year on 'car' write offs. This year is even worse.

Good Luck!

Last edited by foundapeanut; 01-01-2018 at 08:10 AM..
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Old 01-04-2018, 07:59 AM
 
3,136 posts, read 2,254,116 times
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Quote:
Originally Posted by foundapeanut View Post
Our CPA forces us to take the home office deduction.
Our house is paid for, we will be here the rest of our lives as we are older. She said if we didn't take it the IRS would say we did so they'd 'charge' us anyway. Might depend on how much your income is. We are older and our heirs will inherit the home and revenue stream. Our CPA might be dead by the time our heirs inherit so they'll assume things. She is no spring chicken either.

Now regarding the car. Our business bought my husband's car brand new. Luxury Lexus. However, we still need to keep track of every mile he uses for work. (And gas, maintence etc.) He does not use it entirely for work, so he's 'charged' for his use. As income. I use it for appointments too.

You might be ahead by taking the milegae deduction. Another thing your accountant visit can tell you. I will will say for the last maybe 12 years, the IRS has gotten stricter and stricter every year on 'car' write offs. This year is even worse.
The IRS does not "charge you anyway" for the home office deduction if you don't take it. I just discussed this with the IRS agent that handled our audit, since we chose not to take the home office deduction during the years we worked out of the house.

What do you mean the IRS is stricter on car write offs? What changed?

TurboTax will also calculate which way is more beneficial on your car deduction. Mileage is always best for us and it's the easiest to keep track of.
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Old 01-05-2018, 11:56 AM
 
37,821 posts, read 18,665,791 times
Reputation: 11939
Quote:
Originally Posted by ericp501 View Post
I'm launching a small ecommerce business. For now this will be run out of my home, though I am considering getting a small office. I'm trying to get a ballpark idea of what an accountant might cost. Normally I just do my taxes with turbotax, and I'd even consider using turbotax small business.. But there are a few things I want to take advantage of that I'd really like an experts opinion. Like selling my SUV to the business so my payments are made pre-tax. Is the home office deduction worth it or too much of a redflag even if totally legit. Writing off trips, gas, other expenses.. Not just what I did for the year, but what can I take advantage of in the future. You don't know what you don't know.

Trying to get an idea of what I can expect to pay. Sales are light to start as it takes time to get a good footprint on google, I'm hoping to do about $100,000+ in 2018. Simple buying and selling.
I suspect they would charge differently in different area's but here's some food for thought. Do you want to run your business (serve clients and increase business) or do you want to do bookkeeping? I tried to handle it all but never felt comfortable that I was doing the it right and there is so much of it I felt like I was always buried in it.

When it was suggested to me my first thought was no, I need all the money but not long after that I gave in an hired someone who ran their own bookkeeping business. It was the BEST thing I did. I thought when I gave her my previous paperwork she'd run but she got it all organized, directed me how to set up my filing system (easy). We set up what we could on auto-payment, she handles stragglers and payroll and taxes, we communicate mostly by email and at the end of the month I send her the previous month folder. If I had to handle that on top of everything else I'd be pulling my hair out.

Try to find a small business owner (with referrals). Since you're new ask her to evaluate the work load (their time), then as you grow you can increase what you pay.
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