Why It's Worth Paying For a Tax Professional

To save money last year, Anthony Fasano tried preparing his new business's first tax return on his own. Then reality sank in.


"I realized I really had no understanding of the tax laws from a business standpoint," says Mr. Fasano, founder of Powerful Purpose Associates, an executive-coaching company he runs out of his home in Ridgewood, N.J. "I was just winging it."


Mr. Fasano started the business in 2009 as a side project while working for an engineering firm. But when his wife got laid off from a government job last year, he turned it into a full-time endeavor, sensing it would prove more lucrative for his family.

After spending roughly 20 hours trying to figure out the returns, Mr. Fasano ended up paying $500 to have an accountant finish the job, at which point he learned that he had overlooked the need to file 1099 forms for his four contract employees. "I didn't know that had to be done at all," says Mr. Fasano. "I should've gone to an accountant in the beginning."


This tax season, entrepreneurs operating on a tight budget may be tempted to forgo professional help in preparing their companies' returns. But experts say the investment is typically worthwhile -- at least for those just starting out -- to maximize deductions and avoid penalties. Tax specialists can help ensure that business owners don't pay Uncle Sam too much or too little and help identify all the tax breaks they're eligible to receive.
accountants typically charge between $250 and $500 to prepare a start-up company's tax return, says Keith Hall, national tax adviser for the National Association for the Self-Employed, a nonprofit business group in Washington, D.C.


This year, the filing deadline for most corporate entities is March 15. For sole proprietorships and partnerships, the deadline is April 18. Limited liability companies must choose to file as a corporation or as either a sole proprietorship or partnership.


Business tax returns are undoubtedly complex. They include a vast number of rules and options that frequently change. For example, the recently enacted federal health-care law includes a new, temporary tax credit for small businesses that cover at least 50% of the cost of health insurance for some employees, among other qualifications.


"Most people can do the tax return themselves, but it is a hassle," says Mr. Hall. "It's about how much you want to spend on Advil for the headaches you're going to get."


Lana Goldenberg says she lost out on roughly $1,000 last year by inadvertently misclassifying certain deductions when preparing her start-up's first tax return. "It's not a huge amount of money," she says, "but for a small business it matters."

Ms. Goldenberg launched her marketing consultancy out of her home in Marina del Rey, Calif., after getting laid off from a job in the same field in 2008. For her 2010 tax return, she says she's hired an accountant for about $300.



There are a number of deduction options that entrepreneurs may not be aware of. For example, if you've been running your business out of your home, you can deduct a percentage of your rent or mortgage interest, utility bills and repairs, says Cathy B. Goldsticker, a tax partner at accounting firm Brown Smith Wallace in St. Louis, Mo.


If you've been using your personal vehicle for your business, you can deduct however much you spent on gas, maintenance and tolls for this purpose. "Just make sure you have the records to show they're truly business-related deductions," Ms. Goldsticker says.



One tax break in particular that entrepreneurs won't want to miss: the ability to deduct up to $10,000 in start-up expenses when filing a business's first tax return. These include items or services purchased "prior to actually opening your doors," such as software for writing up a business plan, says Scott Berger, a principal at accounting firm Kaufman Rossin & Co. in Boca Raton, Fla.


But entrepreneurs may not realize that not every resource purchased to get a business up and running qualifies as a start-up expense. For example, the Internal Revenue Service doesn't consider computers, office furniture, machinery and other assets that last more than one year as such, says Mr. Berger. (However, many of these items can still be fully deducted either over the course of their lifetime in small amounts or, for 2010 returns, in one fell swoop if they meet certain qualifications.)



Oren Salomon says he regrets preparing his start-up's first tax return on his own this year to save money because he grossly underestimated how much time and energy the job would take. "The process has been very arduous and confusing," he says. "So far I've spent at least 25 hours and I'm maybe halfway done."



Mr. Salomon co-owns Mozign, a Dallas designer and developer of smartphone applications. He started the business with a friend last year after graduating from the University of California, Berkeley, because he wasn't able to land a job.

Next year, Mr. Salomon says he plans to hire an accountant. "It will be totally worth the money," he says. "I'd rather be working on product and spending my weekends with my girlfriend."

Let me help you save money on your taxes, CALL NOW for a free 1 hour consultation- (562) 420-0043.

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New Ideas to Make Money in This Struggling Economy

Many small business owners are struggling to keep their heads above water in today's economy. Even though large corporations are faring reasonably well, small businesses are suffering in the downturn from which America is just beginning to recover. Recent legislation provides hundreds of millions of dollars for Small Business Administration loan guarantees, but entrepreneurs can't plan to expand unless their revenues recover.

To that end, what can a small business owner do to avoid seeing red in the reports generated by his financial software? Three key tactics can help entrepreneurs make it through today's downturn and come out stronger on the other side.

Tactic 1: Be Mindful of Appearance

Small business owners offer either a product or service, and keeping appearances in mind can benefit both types of owner. Companies that provide products should be most concerned with the image that their product conveys. It's likely that a product provider is already cognizant of his goods' attributes and has optimized their appeal.

A small business owner can always focus on his own appearance, however. A financial planner (for example) who wears casual clothes may want to seem relaxed and laid-back, and in better times that may have been a workable branding strategy. But people are scared; they want an authoritative expert to help them with their finances. Suits or jackets are more appropriate, and sartorial trends have been moving this way in the corporate world, too.

Retailers are another group of small business owners who can benefit from increased attention to appearance. Stores should be clean and inviting; products should be logically displayed. Now is a good time to make long-delayed cosmetic upgrades, as long as they don't break the bank: contractors are widely available and ready to do business.

Tactic 2: Expand a Business' Presence

Low-margin small businesses have used fairs and markets as a revenue source for decades. It's unlikely that organic farming would be viable without farmers' markets. But a small business owner doesn't need to be a purveyor of candlesticks or vegetables to have a presence at farmers' markets and other community gatherings.

A restaurateur can showcase his cooking at a holiday event. An office supply store owner can sell products at a market. Private practice lawyers or other service providers can have a presence at community events; handing out business cards or promotional items can lead to increased revenue in the future.

Small businesses are a popular media topic at the moment. Business owners can contact local reporters to express interest in interviewing for a future story; if the reporter agrees, free publicity is a guaranteed result.

Yet another way to expand brand awareness and earn goodwill is to offer seminars to community groups. Many local colleges offer small business courses; contacting the schools to see if they need another speaker or panelist can lead to raised awareness of a business within the community.

Tactic 3: Look for Synergism on the Community Level


It's likely that an entrepreneur's community has many small businesses. Chambers of commerce hold networking events, as do some business owners themselves. An entrepreneur shouldn't miss an opportunity to network locally, especially with the economy in its current state.

Networking can lead to both more business and better business opportunities. By discussing a company's activities or prospects with other small business owners, the chances of creating new revenue streams are increased. A coffee shop proprietor may find that he can collaborate with an art dealer to hang artwork for sale in the coffee shop. Alternately, the art gallery could use the coffee shop for catering services at an opening.


Similarly, a calligrapher can work with the owner of a stationery shop to create personalized paper goods. A bait-and-tackle expert can pursue collaboration with the proprietor of a marina to offer fishing supplies to boaters.

Synergistic opportunities are endless, but, as they say, it takes two to tango. Unless a small business owner puts himself out there and appears willing to collaborate with fellow business owners, he cannot expect to see revenue growth via synergy.


In Conclusion:


America is recovering from the worst recession since the 1930s, and many small businesses are barely scraping by. Not every small business can survive today's economic situation, but creative and resourceful small business owners significantly improve their firms' chances.


If desperate times call for desperate measures, the state of the economy calls for unconventional measures. The economy is projected to improve in 2010 - Dean Maki, Barclays Capital's historically accurate forecaster, expects 3.5 percent growth - but until consumer spending rebounds, businesses large and small will have to think unconventionally.

Why QuickBooks?

Quickbooks is fast and easy, leaving you time to focus on your clients and their needs.

WHAT'S THE BEST WAY TO GET STARTED?

QuickBooks has been designed for small business owners who aren't experts in acounting and bookkeeping. Using Quickbooks will help simplify work you already do-- like paying bills, invoicing customers, tracking sales tax, and much more.


WHO ARE CERTIFIED QUICKBOOKS PROADVISORS?


Certified QuickBooks ProAdvisors are professionals who work with small businesses. These ProAdvisors are QuickBooks experts-- they've completed a comprehensive QuickBooks training course and exam in order to become certified. They can get you started on the right foot, aiding in set-up, training and troubleshooting.. even helping you move from whatever your current accounting method is to QuickBooks.



Even if you already have an accounting professional serving you, if they don't happen to provide QuickBooks-related setup, training, and consultation services, you should consider contacting a local Certified QuickBooks ProAdvisor.


WHAT COULD YOU LEARN?

Here are just a few examples of what you could learn:

• Whether using financial software can save you time
• Which edition of QuickBooks is the best for your unique business needs
• How to manage your cash flow at start-up
•  How to accurately track expenses and income

CERTIFIED QUICKBOOKS PROADVISORS ARE HERE TO HELP!


QuickBooks users who get help through a ProAdvisor or accounting professional have a high satisfaction level with QuickBooks. Whether you need help setting up and customizing QuickBooks, lerning how to more efficiently use the software, or better understanding the financial data you currently have in Quickbooks, your local ProAdvisor is available to help you get the most out of the software.

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