Comments on: Do You Need An Accountant?

By: Ryan

Ryan — Sat, 23 Jan 2010 23:48:36 +0000

Pete, I recommend going with a professional accountant if you own a business. Start looking now for someone who specializes in small businesses, and try to interview them if possible. I interviewed a couple people, then chose the one that was the best match of experience and price. I was also lucky that they were the closest to me in proximity.

Be sure to ask them about forming a legal entity such as an LLC or S-Corp, or another business form. There can be tax benefits to forming under one of these. The business accounts make it much easier to keep your finances separate, which makes it easier come tax time, and if you were to ever sell your business. I’ll try to write more on these topics in the near future.

By: Peter

Peter — Thu, 14 Jan 2010 15:35:39 +0000

I think I may be in this boat this year. I’ve made enough money this year, and gotten to the point where it may be time to get the help of a professional. I’m thinking about getting an LLC as well, and possibly thinking about opening business checking accounts/etc. I’d be interested in hearing more about the process you went through to do this!

By: Ryan

Ryan — Wed, 13 Jan 2010 18:11:39 +0000

Carol, Thanks for the comment. Taxes are not my favorite topic in the world, but I do my best to understand the ins and outs as they apply to my situation. As a small business owner I think it’s important for me to focus on my business operations more than the taxes and other activities that can be outsourced. But it’s also important for me to understand the how’s and why’s and be proactive with my taxes. I call my accountant with an organized list of questions each time we make a new filing or do something new. I’m glad she is patient, because I usually bring several questions to the table (I’ve got a nice long list for her this afternoon, in fact!).

By: Carol Topp, CPA

Carol Topp, CPA — Wed, 13 Jan 2010 15:23:15 +0000

Ryan,

I loved reading your progression from doing your own taxes to hiring a professional. You did everything I tel my clients to do! It was refreshing to read about someone who really followed the advice and did it!

You are my favorite type of tax client: one who has done their own return, knows there way around the basic tax forms, knows the difference between a deduction and a tax credit, but just needs help in a specific area.

Thanks for sharing your experience.

By: Ryan

Ryan — Mon, 11 Jan 2010 17:52:33 +0000

Don, I formed my LLC fairly early on – at the beginning of 2008 (I started this site in March ’07). My income from my business and websites at that point was still very low, but it was growing. I formed the LLC to make it easier to open business checking and savings account and make it easier to keep my finances separate. I later opened my Solo 401k with Vanguard because I wanted a self-employed retirement account. The Solo 401k was the best option for my situation, and I’ve been using Vanguard for individual investments for almost a decade, so it made sense to stick with them (the accounts are under the same dashboard, so I don’t need to log on to different accounts to see everything).

So, to answer your question, forming the LLC was more about facilitating other aspects of my business than anything else. The cost in my state is only $125 for a lifetime LLC, but prices vary widely depending on which state you live in. Some states also require an annual fee on top of your original organization fee. Check with your state for more information.

By: Don@MoneyReasons

Don@MoneyReasons — Mon, 11 Jan 2010 17:04:34 +0000

Hi Ryan,

Say, when did you decide to create your LLC? Was it after you were generating enough profit to justify the filing cost or from the very onset?

Nice move on your “Solo 401k” sounds like a great idea!