The joys of consulting

[jducoeur]

Oh, right. One project I am *not* looking forward to this week: figuring out estimated taxes for the first time. Not the end of the world, but it's always a bit intimidating to confront paperwork I haven't dealt with before. (And never fun to hand thousands of dollars to the government.) This is, of course, made worse by the fact that I have nothing more than ballpark guesses about my expected income this year -- while my current project is hopefully going to hold steady for a while, I expect I'll eventually have to find another gig, and it's anyone's guess what things will look like then. (The issue mainly being that whether I continue to work steadily or not changes what bracket we're in -- I assume that factors into the amount I need to send.)

Ah, well -- time to roll up sleeves, download some PDFs, and make a bunch of half-assed guesses...

Comments

[goldsquare.livejournal.com]

A good tax accountant is worth it. Most seriously worth it.

[new-man.livejournal.com]

You know if Tibor and I agree than it's either a True Thing or The Apocalypse. You'd hire a trained professional for any other dealing with the government; hire one for this one. Have someone else do your taxes and focus on your business.

[goldsquare.livejournal.com]

Well, I just bought some green bananas, so it best not be the apocalypse. :-)

Seriously, the business accountant that my wife uses, has 2 freaking Ph.Ds in this stuff. If there is that much to learn, we are all just amateurs.

Also, I watched her take my very best efforts, and squeeze a lot of money out of them. :-)

The tax advantages to us of how we manage the incorporation of Robin's firm and the entanglements with our personal finances, are just amazing to me. By doing it right, we save lots of money, and the advice was just as valuable when refinancing our mortgage, or making other large purchases.

Skip the over-priced white-shoe firms, but get someone good that knows corporate taxation, and see what they can advise you. Write me privately if you want Robin's person - who is in Waltham on Main Street.

[jducoeur]

Not sure whether it'll be this time around, but it's certainly going to happen somewhere along the line. We've got one recommendation already, but I might check out both when the time comes -- thanks...

[baron-steffan.livejournal.com]

TurboTax is your friend. Really. These days, I won't touch a 1040 without it. (And it's deductible.)

[goldsquare.livejournal.com]

Self-employment tax, and quarterly, are complicated. I was a big time "Tax Cut" user, but with Robin's corporation, off-the-shelf software is no longer sufficient.

YMMV

[etherial.livejournal.com]

Federal Estimated Taxes are pretty easy because the error window is large.

Re: YMMV

[fairdice.livejournal.com]

Also, if you end up needing to write them a check at the end of the year, there are two ways to calculate your I-didn't-withhold-enough penalty: you can assume you made your money at a constant rate through the year, or you can do the more difficult thing and calculate what you really owed them on a quarter-by-quarter basis, and only pay a penalty if you were behind. If you do the latter, you don't actually need to predict very much.

Re: YMMV

[jducoeur]

Useful to know -- thanks...

Simpler way for Estimated Tax figuring

[pamelina.livejournal.com]

You don't have to do any of that figuring and guessing about future estimated taxes, though. If you take what you paid in taxes for the prior year, you can just pay that same amount in the current year in 4 equal installments. Then you are exempt from penalties and interest if you guess wrong. And it's sooo much easier than trying to figure out your future income and estimated tax payments from those forms and formulas. That's what I've done for over a decade (er, what my accountant does.)

If this is the first year you're paying estimated tax payments, I believe the gov gives you a pass on figuring it out with equal payments as long as you get it all paid by April 15th. But I could be wrong about that one.

Re: Simpler way for Estimated Tax figuring

[jducoeur]

Interesting. In this particular case, I had no income last year (it was entirely CommYou-focused), so I don't know how that plays into it. But it's useful to keep in mind -- thanks...