Tax Prep for Internet Entrepreneurs?

[Asad]

I am looking for a tax prep pro for the upcoming tax season. I don't want to do this myself since it is against my religion to perform any task outside of my area of expertise when I can hire a qualified individual to do so. Does anyone here have any suggestions as to what I should look for? Anyone you would recommend in the United States?

 

[eliquid]

Define tax prep.

Is it bookkeeping only? If so, you dont need anyone in the US generally.

Is it tax planning? If so you need a CPA level person in your country.

Is it more than bookkeeping, but less than planning? See the above.

 

[Potatoe]

I originally used someone local, fancy guy with letters after his name, who made so many mistakes. He wasn't familiar with online business. He counted all of my income once when it landed in PayPal, and again when I transferred it to my bank account. Could have been really, really bad if I didn't notice.

I found someone else that did bookkeeeping but wasn't local, didn't have any of the same certifications, but had experience first hand in running online-based businesses and that's been much better but I still have to be careful and keep a close eye on things.

For example, they used the government's flat rate for currency exchange for the year (which is an option instead of going on a per-transaction basis - totally normal way to do it), but that didn't account for the fact that the rate PayPal gives me to exchange currency is worse than the average rate, so I almost paid taxes on the difference between the real rate and PayPal's rate, except I noticed the discrepancy.

My grandfather was a brilliant entrepreneur and unfortunately he passed while I was still too young to appreciate that, but there is one lesson of his that my mother made sure I heard: You need to have an understanding of this stuff, even if you're hiring someone else to do it. It can save you a lot of money because you're going to know and understand the flow of your business better than anyone. You can catch the types of innocent mistakes I mentioned above, and that's not even getting into the malicious stuff you could encounter down the road. I believe this lesson came from an experience with the latter.

I think this applies to other services as well, but is especially true when it comes to your books and your finances.

So, I'd look for someone that has experience with your type of business, and seems willing to really listen and understand how your money moves.

 

[eliquid]

I originally used someone local, fancy guy with letters after his name, who made so many mistakes. He wasn't familiar with online business. He counted all of my income once when it landed in PayPal, and again when I transferred it to my bank account. Could have been really, really bad if I didn't notice.

I found someone else that did bookkeeeping but wasn't local, didn't have any of the same certifications, but had experience first hand in running online-based businesses and that's been much better but I still have to be careful and keep a close eye on things.

For example, they used the government's flat rate for currency exchange for the year (which is an option instead of going on a per-transaction basis - totally normal way to do it), but that didn't account for the fact that the rate PayPal gives me to exchange currency is worse than the average rate, so I almost paid taxes on the difference between the real rate and PayPal's rate, except I noticed the discrepancy.

My grandfather was a brilliant entrepreneur and unfortunately he passed while I was still too young to appreciate that, but there is one lesson of his that my mother made sure I heard: You need to have an understanding of this stuff, even if you're hiring someone else to do it. It can save you a lot of money because you're going to know and understand the flow of your business better than anyone. You can catch the types of innocent mistakes I mentioned above, and that's not even getting into the malicious stuff you could encounter down the road. I believe this lesson came from an experience with the latter.

I think this applies to other services as well, but is especially true when it comes to your books and your finances.

So, I'd look for someone that has experience with your type of business, and seems willing to really listen and understand how your money moves.

I've ran into this, a lot.

I've hired the best in my state ( actually tax attorneys ) and I have also been through a ton of CPA's and bookkeepers. No one really gets it. The ones that do, tend to be so damn slow that the day before deadlines I am still waiting.

I too have had to keep a close eye on things and basically school them all in their errors. Specifically the one about Paypal and normal bank accounts. It seems none of them "get it" that Paypal can take money in for me, be transferred to a bank account and not be "new money" that needs to get taxed again when it hits my bank account. It's so awful, its 1 reason I don't deal with Paypal anymore which is a horrible reason actually.

It really is a shame.

You can't rely on anyone knowing how to do their job correctly in this time and age. For some of my business dealings, I do the books entirely and then hand off to a CPA to check over and file. For 1-2 business dealings, I have someone else do them just because I am too busy.

It's a nightmare trying to find someone that just gets it and does it right though.

.

 

[Asad]

Wow....definitely glad I asked. I thought I was the only one dealing with this issue!

Define tax prep.

Is it bookkeeping only? If so, you dont need anyone in the US generally.

Is it tax planning? If so you need a CPA level person in your country.

Is it more than bookkeeping, but less than planning? See the above.

Im looking for someone to submit my company tax returns and maximize my deductions while looking for opportunities to minimize my taxable footprint. So CPA?

 

[TopHat]

While trying to find the best US tax structure for our 2 person business, I did my research in advance and it seemed the best vehicle for a single person was an S-Corp & the best for multiple people was an LLC. I met with our "big-name-firm" CPA and asked if we could form an LLC comprised of 2 separate S-Corps. He seemed confused, said he'd need to back to me.

A few days later, he said that'd be fantastic and that he'd be recommending that to other clients.

How you call yourself an accounting professional and not already have that nugget in your arsenal is beyond me.

Bottom line - some CPAs are form fillers, others work to minimize your taxes. The difference matters.

 

[eliquid]

While trying to find the best US tax structure for our 2 person business, I did my research in advance and it seemed the best vehicle for a single person was an S-Corp & the best for multiple people was an LLC. I met with our "big-name-firm" CPA and asked if we could form an LLC comprised of 2 separate S-Corps. He seemed confused, said he'd need to back to me.

A few days later, he said that'd be fantastic and that he'd be recommending that to other clients.

How you call yourself an accounting professional and not already have that nugget in your arsenal is beyond me.

Bottom line - some CPAs are form fillers, others work to minimize your taxes. The difference matters.

I man, I am glad you brought this up.

I have been in this situation too.

I wanted to have an S-Corp own my shares in a LLC. So basically the LLC is owned ( shows member/manager ) by the S-Corp, which is owned by me.

Several CPA's just acted like I had 5 heads and all of them wearing hockey masks with horns.

It really is shameful what is allowed to practice out there in the world.

.

 

[GNews]

Well for me this year. I had such a terrible stretch, my tax prep is pretty simple.

Start with a 0 and subtract everything... to leave me with negative that puts me at Zero

 

[Asad]

Well for me this year. I had such a terrible stretch, my tax prep is pretty simple.

Start with a 0 and subtract everything... to leave me with negative that puts me at Zero

Even pre-revenue companies can have substantial tax liabilities from what I understand. Even if there is no tax liability, there are a number of startup costs that can be written off. Im trying to avoid the former and take advantage of the latter - or at least not get hammered unnecessarily lol