Help needed with Taxes

Nikon Nick · Mar 13, 2009

Ok, so my business is finally starting to pick up. So now I need to start worrying about the taxes involved with said income, but when it comes to everything accounting, I'm very ignorant.

What I'm wondering is for each job I do, what percentage of the pay should I be putting aside for taxes? Also, what taxes?

Mike_E · Mar 13, 2009

This is the time where you need to be professional (as opposed to being A professional) and pony up for an accountant. Although not quite as detailed offering tax advice with out knowing your situation is kind of like advising you how to remove your own appendix. Not the best of ideas.

After you get through this, go ahead and put a lawyer on retainer. Be sure to budget 2 or 3 lunches with him/her a year.

Really.

mike

guitarkid · Mar 13, 2009

I was in the same boat and have used turbo tax for the last 5 years....has never failed. It is so in-depth, but easy to use! It walks you through EVERYTHING! Itemizing, depreciation for gear, even square footage of your home used for business! gas, mileage, everything! i still have a day job, as does my wife. we have a house and i run the biz out of the home. not just photograhy, but i have video production and a recording studio for bands as well. there is A LOT going on and turbo tax does it all. i get the home and business version...about $95. through the year i keep all my receipts and log them in an excel spreadsheet, keeping like items together, so at the end of the year i can just put the totals in where they belong.... gas money, electric, gas, marketing, etc. it is more thorough than the average accountant and will find the most recent tax breaks and get you the most money. good luck.

Big Mike · Mar 13, 2009

I wouldn't hire a photographer to do my taxes...and I wouldn't hire an accountant to shoot my wedding. Chances are that you will be audited sooner or later, so I think it's a good idea to make sure you have a professional helping you out...either preparing your taxes or at least giving you sound advice.

guitarkid · Mar 13, 2009

good points, i was actually audited, but when the IRS came to my door they had realized they made a mistake. they asked who did my taxes.... i do. they reviewed everything and were surprised at how thorough my books were. thanks turbo tax! this was about 5 years ago. turns out they were a little outdated and weren't completely up to date on the couple tax laws they were coming to see me on. i get the most recent up to date laws upon installing the app. i tried going to accountants before. not only do they not get a lot of things, but they can cost money! i don't have the time to sit with someone explaining things. i know what i bought and why i bought it and what it's used for. i also purchase the tax insurance before transmitting, where, IF there are issues, i am represented by a certified accountant, who also goes over my taxes online before being submitted. IF they find anything, they let me know before submitting. IF they don't, it gets submitted, i'm emailed from the IRS saying it was approved. My taxes have been done and money deposited a week already. In the end it's all in what you're comfortable with. I have always been good in accounting and actually enjoy doing it. most important, regardless of what path you choose, keep GOOD RECORDS! as mike said, don't hire a photographer to do your taxes and vice versa....but then again, i have been to some doctors with degrees on their wall and they're quacks. if you go with an accountant, it's best to get a referral, as with anything. make sure they understand the business ins and outs, especially in your field of work.

Big Mike · Mar 13, 2009

I used an accountant for my personal and business tax preparation last year...but my business tax was very basic as I didn't do much actual business. I think the accountant's fee was a bit high for what he did. This year, I'm keeping all my business books in Quickbooks and I'm planning on using a tax preparer (H&R Block etc) as they can do pretty much the same job for a lower fee.

I will, however, go back to my accountant at some time, for help with business planning etc.

Nikon Nick · Mar 15, 2009

Thanks guys, this actually does help. I learned a bit of accounting in college, but sadly not enough. I'm going to have to consult an accountant regardless, I was just hoping to save some money by using the vast knowledge of my fellow photographers here. :mrgreen: