QotW: How do you complete tax preparation for you personal/business taxes?

[Pres]

I have not seen any new ideas for the QotW, so I will pose one that has been on my mind this weekend. I have been working in Quickbooks to prepare the taxes for the LLC of which I am a member with my 3 sisters. It is farmland with a barn, two houses and some outbuildings. Paperwork is easy using the accounting program even though you have to understand how to enter things. I used to do all of my taxes in Quicken, but after the LLC formation we have them done by an accountant. I do all of the preps, and they crank out the taxes for the LLC and the forms for the members.  So all of this makes me wonder if others use a tax program, spreadsheet, tax consultant or other means to complete their personal and/or business taxes?

QotW:  How do you complete tax preparation for you personal/business taxes?

 

I have probably asked this before, but good to return to it this time of year.

best,

Pres

[Mark C.]

 

My deep dive into taxs from a full timer

Just had my 2 hours appointment with our tax man  last week. He called me this past weekend with a few qestions as well.

We have a complex tax situation -two business's and a retired wife from a state job (thats  the easy one)and last year a ballon payment from my wifes house sale that closed after we carried the note for 4 years.

I have 3 checkbooks-one for each business (a pottery bus and diving business and a personal one)

I keep these current month to month with accounting /balancing

I use a very old quicken for mac software thats tweeked heavly for all my categories  (I would use quickbooks or excel but back in the day before Macs took off that where not going to support Macks for a spell )that all changed when macs took off.  By then I was 10-15 years into quicken..I owned the discs forever and it was easy-my version is not at all like how it came after years of tweeks for a pottery and diving business

At the end of the year I go thru 12 months of credit card statements and weed out what account each charge is for (this is already done on each statement every month so the checks from each business pay for those charges thta go with that business) and enter them in quicken. I also enter all cash expenses and intake in a cash account. In quicken I have that credit card account as well. 

I should add that on my refrigerator side I have a small sheet that I record all money taken in in pottery-its divided in lines to all shops/galleries and cash  taken in in studio and misc etc . I have at least 10 years worth of a them clipped together-all pottery income is on this small cheat sheet except for art shows that I keep in a book that dates back to 1973-I total that in January and cross check my quicken reports with that  art  fair book. I also on that cheat sheet show ebay sales from my diving business (equipment sales) and the past 3 years I have a solar expense categorie for the solar system I put in as its a big tax credit . After my xmas sale (xmas eve) I start entering all the data for all the businesses -go thru the credit card statements  and enter that data. by middle Jan I have it all in. I also get stock 1099s  (I have my own stock small portfolio from TD ameritrade ) and I get a Vanguard 1099 as well. I start reviewing the data and print on stcatch paper my reports for each business. That always needs tweeking and mistakes show up and I forgotten expenses turn up in my tax file so after about 3 print outs I have the final and I have a copy and one for my tax man. I have to sort the utility and electrical expenes as I have.40% business write off on any home expenes as my pottery business takes up 40% of our buildings-Property tax  and insurance etc  (40%) so those need to be weeded out as well. lost of fun here preping all this for the tax guy.

It takes us about 1.5 to 2 hours with our tax man (he is all a pottery customer) to go thru the reports within a few weks he tells me how much I can contribute to my SEP IRA and my Roth IRA .  I have to say we have a good time with Ben our tax guy and I can talk about on or off the record with him and have some fun at same time. I go in and sign off the 3/4 inch tax report to state and feds and pay him about 525$-575$-I'll post how many pages as I go get it this week. Than I start writing checks to Feds and State-also 1/4ly checks  for prepayment for self employment. Really all big fun. So that a full timers tax story-lots of data entry and record keeping. 

The 2021 year was biggest sales year  ever with covid buying at a all time high. and just about no shows. I bailed out of two local venues and cut some shows so that would never happen again but the taxs where brutal . Sometimes I like paper work other times I hate it so its a love hate deal. I like to get it all behind me by March

This is more detail that I would normal tell one but as you can see for self employed full timers it can be complex

I just got my return back and its 73 pages, Time to write some BIG checks

 

Edited February 21, 2023 by Mark C.
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[JohnnyK]

We provide info to our CPA and he generates the tax return which we review and approve before submitting to the IRS and the state...

[Callie Beller Diesel]

Ok, so Canadian tax law is a bit different, but Mark, they make apps for all that! You don’t have to manually enter all the data. Check into downloading CSV files from your statements and Square. Most up to date tax software should accept them.

I file and remit/claim GST (federal sales tax) quarterly, so by the time I hit income tax time as a sole prop, all my work is already done. Our holdup is waiting for my husband’s employer to file his T4’s and relevant investment documents, plus some paperwork for the kids so we can file jointly. I use a robo advisor, so my investment paperwork is a quick download. I automate as much of my banking as I can, and try to do little amounts of book keeping/money management more often so I don’t wind up with a giant fearful job at tax time. Also key to this is Mike Michalowicz’s Profit First method to manage cash flow. 10/10 recommend it, especially if you like jar/envelope money management systems, or like to see/hold your money to understand it.

I have a separate credit card and bank account for all business expenses, so I can separate everything out easily. Because I record all my sales in Square including the cash ones, I can download a CSV file from both Square and my credit card and import everything into a bookkeeping Excel spreadsheet my accountant made for me. The only thing I have to manually enter are things like Square fees for individual months, and any purchases made by e-transfer. She takes the info and files for me. 

 Profit First method gets you to set aside a pro rated percent of your sales for taxes that varies based on your gross income. If you do a quick little online money shuffle once a week based on that week’s sales, at tax time you have enough to pay your tax bill already set aside in an account. For GST, the amount you have to remit to the government is offset by the GST you paid while buying goods and services for your business. So for me it winds up that the account also holds enough to pay my accountant. If I have anything after that, I take it as a small bonus.

[Mark C.]

Sent you a pm Callie