The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Book for the Self Employed?||Date: 5/30/2003 10:05 AM|
|Author: irasmilo||Number: 65588 of 120428|
I'd like to be familiar with things, before seeing the accountant. One of the companies I vendor for most of the time uses one, and says he's good, but how do I know that?
While I'm sure to use one at the end of the year, I'd rather not walk in there with a box full of random receipts. I'd like to be able to know at least what catagories to place them into, plus what expenses I should keep receipts for.
That's why you see the accountant NOW. You don't bring your receipts. You bring your head. You will describe your business, what you do, where you spend money, how you make money. The accountant will ask questions and provide advice. S/he doesn't need the documents at this stage.
I looked at Pub 334, but couldn't get any of the IRS pubs to download. Something wrong with the site. I'm also going to look into the retirement accounts for self employed, IIRC you can put more than the $3000 limit a 401 has.
I did look over 334 on the IRS site, unfortunately it reads like a IRS publication (grin).
They're not that difficult to understand once you get used to the style. Keep at it and you'll see.
Many of the books I've looked over on self employed (aka small businesses) tend to spend alot of time on how pick one, set it up, and run them, not tax and accounting concerns. I've been doing this long enough, that the business runs well, I've just not been taking the itemized deductions.
All the more reason to see an accountant now. You are not looking for itemized deductions, you are looking to track your business expenses which are deductible as part of your gross income (page 1 of Form 1040), not as standard/itemized deductions on page 2.
And since I didn't make it a habit of collecting receipts, I can't go back and amend my returns :(
Again, don't be so sure. There are other ways of generating documentation. If the expenses were charged on a credit card, you may be able to recover the receipt from the cc issuer or the merchant. If they were paid by check, your cancelled check may be sufficient. Let the accountant guide you. You obviously won't recover 100% of your allowable back expenses but you may be able to reconstruct enough to make filing amended returns cost effective.
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