[Jewelry making - Article 00269] - Re: [Orchid] [Biztalk] Taxes - First Sch C

[Rexarino]

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    James, I respectfully disagree - IF - the business is small. My
    small business accountant took the information I gave him, plugged it
    into a worksheet, and handed me an income tax return to sign. I was
    the one who supplied all the records for expenses, I was the one who
    counted and valued the inventory, etc. 

    Later, I bought accounting software, learned to use it, and at the
    end of the year I bought a copy of TaxAct and filled in the blanks -
    and it was easier than making appointments and scheduling trips to my
    accountant at his convenience. In the process, I learned what was
    profitable and what I underpriced. I learned what I had too much of,
    and what I bought recurringly at too small a discount. I never
    learned to charge enough for my time, but... 

    I even learned to depreciate tools and machinery, since the tax
    program did the math. 

    Before I used a commercial tax program, I made a mistake and the IRS
    called. I talked to the defensive agent in a nice way, he responded
    with civil, then pleasant responses, and I found out what I had done
    wrong. Along the way, I asked about some things I hadn't deducted
    because I wasn't sure of the rules (leather clothing and gloves, and
    computer accessories). The IRS rep allowed the deductions, and I got
    a bigger deduction than I filed for originally. 

    Don't think the IRS is going to throw you in jail for a hundred
    dollar mistake. They want the big fish, and if you realize they
    expect you to be antagonistic, but instead, you treat them nicely,
    they respond in kind. All in all, I have been audited 4 times - once
    because I was stupid and used the wrong tables, once because I didn't
    provide support for my numbers, and twice for entries that rang the
    "check this guy out" bell. All those audits were conducted with one
    phone call or letter from the IRS and one follow up letter, sometimes
    with my check, sometimes waiting for a refund. The IRS was easier to
    deal with than some of my better customers! 

    If you have employees, I would hire a bookkeeping service for
    payroll, but I would still want to be involved in the tax preparation
    - that''s where I get the bigger picture of my business. Of course,
    this isn't the right advice for everyone - so do what works for you. 

    I will admit that one year with an accountant taught me some things
    about setting up ledgers - but the best advice I got for that came
    for free, from the Small Business Administration and the retired
    businessmen that volunteer there - and from my wife, when I learned
    how to ask her. 

Rexarino

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