Single Member LLC Taxes

[mrj567`]

I'm new to this forum although I've come here a ton of times for knowledge in the past.
How many contractors on here have accountants or bookkeepers vs doing all the bookkeeping and accounting yourselves? I've delved into how taxes and bookkeeping are done for a single member LLC and it's quite overwhelming to be honest. I think it's doable for me to do it myself over time for sure though. For those of you that do your own bookkeeping do you have any tips on bookkeeping and accounting for a single member LLC?

If anyone reading this thread is looking for info related to taxes also, I've learned a great deal from "Business Finance Coach" on YT. I'm still looking for any other valuable information and resources so any help would be greatly appreciated.

Also if y'all want to include whether or not you hire any other tax professionals other than a CPA that would help a lot! I'm on the fence as far as paying LegalZoom $50 a month for unlimited consults from tax professionals, but I'm not sure if it's worth it.

 

[AC\DC]

I use quick book online for book keeping , and trying to train my wife. Make sure you fill for s-Corp status and take a average payroll. I did not do that my first year and would of paid a hefty tax on SSN and Medicare. Just found a bunch of right off but could of turn out bad
Get a good Cpa that cares about saving you money.

 

[jim dungar]

Why do we expect our customers to hire us instead of doing their own electrical work, but then we turn around and do DIY taxes and legal work?

I don't think most of us need to keep these professionals on retainer, but it is good to establish some continuing relationship with one.

Of course there is rarely a single right way to do things, so it makes sense to get background information and compare notes with our peers. The more informed we are, the more likely we can communicate our needs and understand what is being presented.

 

[mkgrady]

I suggest you use something like quick books for keeping track of everything and use a CPA to do your taxes. I would skip the legal zoom thing. You probably don’t know what questions to ask them so I would spend that money on a CPA that serves multiple small contractors. Just let them know you might need a little extra help in the first year.

 

[mrj567`]

Why do we expect our customers to hire us instead of doing their own electrical work, but then we turn around and do DIY taxes and legal work?

That's the same way I'm thinking of it, although I don't expect a homeowner to hire me instead of doing it themselves. I do expect if they do it themselves they'll wind up hiring me to fix all the problems and end up paying more! I plan on hiring a tax professional and learning to do my bookkeeping myself because I'm interested in the numbers of my business. I pretty much plan on outsourcing all the parts of running a business that don't interest me or that can potentially land me in trouble; so doing taxes hits both those marks.

I did consult with several attorneys for going over my contracts which I drew up myself, and I only did them myself because I have prior legal experience as far as contracts and the legally binding language that makes a contract a contract. So I do believe if we have experience and interest in something we should do it ourselves and save a little money in the process.

I like your train of thought on the whole homeowners doing their own electrical, that's right on point.

 

[mrj567`]

I suggest you use something like quick books for keeping track of everything and use a CPA to do your taxes. I would skip the legal zoom thing. You probably don’t know what questions to ask them so I would spend that money on a CPA that serves multiple small contractors. Just let them know you might need a little extra help in the first year.

I've heard that QB requires a bunch of input and knowledge on bookkeeping to use the platform correctly. What's your take on this? If that is the case do you have any recommendations regarding bookkeeping for all the manual input that is required.

It would be nice to hold all the receipts on there in case of an audit. As far as the legalzoom thing, they offer a discounted price on QB (I think $75 instead of $125 a month) and that comes with the unlimited tax consults with tax professionals including CPAs. They said they can have a CPA do my taxes for a fee. I wonder if these are super generic CPAs rather than getting a CPA that works with small contractors like you mentioned.

 

[hbiss]

I've heard that QB requires a bunch of input and knowledge on bookkeeping to use the platform correctly. What's your take on this?

You do have to set it up correctly in the beginning and that depends on your operation. This is where a local CPA who knows your business can help you get started by doing that for you. It's well worth it to pay for the couple of hours for them to come to your location or you could even bring your laptop to them. They will also be able to show you how to do every day tasks like generating invoices, receiving and posting payments, keeping track and paying sales tax and printing checks, adding new customers and vendors, etc.

At the end of the year you generate a General Ledger report and hand it to your CPA to do your taxes.

And you ABSOLUTELY must keep all your receipts, invoices and any other business related documents for at least seven years in case the IRS or State comes knocking.

Oh, and a word about sales tax. MAKE SURE that you get a sales tax number (which is usually an EIN also) from your state tax department and MAKE SURE you know what to collect sales tax on according on your state and make sure you remit it to them when they want you to. I've found many ECs don't think they need to collect sales tax. Years later some customer of theirs gets audited and they come across an invoice from the EC with no sales tax on it. So now the EC is on their radar and liable for maybe hundreds of thousands in back taxes, interest and penalties.

So obviously you should realize that this is not something that an on-line accountant like Legal Zoom is going to be able to do.

-Hal

 

[Hv&Lv]

One thing that made it hard here was sales tax on labor. Trying to keep up with different counties tax rates was going to be a nightmare.
Said some ugly words when that decision was made..

 

[electrofelon]

I have a CPA do my taxes. That is a must. It costs me $525/yeah, and he probably saves me $2500. You really must find a good CPA who knows how to work the LLC to lower your tax liability. I don't have a book keeper though. For me it seems like it would take almost as much time to explain things to the bookkeeper so I might as well just do it myself.

 

[AC\DC]

I’ll will restate one very important thing that I have ran across a couple CPA did not know if you could do as an LLC, ELECT S-CORP STATUS. If you run across some one that does not know about that, RUN

 

[romex jockey]

Why do we expect our customers to hire us instead of doing their own electrical work, but then we turn around and do DIY taxes and legal work?

Get a good Cpa that cares about saving you money.

yup....what ^^^^ said....

The 'tax code' changes quicker than ours does, especially 'in these times'.....~RJ~

 

[zbang]

Oh, a terminology thing- bookkeeper vs accountant. Most of our day-to-day work is bookkeeping (literally "keeping the books"), it's putting numbers in the right place. writing checks, that sort for thing. Once things are set up, can be pretty easy.

Accounting gets to things like setting up the books with the right accounts and procedures, and checking to see that things go in the right place. That job usually also includes tax filings and advice.