For the self employed...... help me please

[Ernesto]

I have just started working out of home as an engineering consultant. I understand that I must make quarterly payments to the IRS & the state (ca).
What's the fix for a guy like me (who is clueless)?

[donco6]

1. Here . . .

. . . http://www.irs.gov/businesses/small/

[Lars39]

2. Find a good accountant.

:)

[Bush_Eats_Beef]

4. Gotta agree with that one...

I was fortunate enough to meet a great CPA due to unrelated circumstances right around the time I started my business.

I can ask him brief questions over the phone without getting charged for every little thing. When he accumulates a half hour or so of his time he sends me an invoice based on his hourly rate.

If you are self-employed, an IRS audit is always a possibility. If that happens, you want a GOOD...and if possible, GREAT accountant.

Get an accordion file or a 2-drawer metal cabinet and some Pendaflex folders and SAVE...EVERY...RECEIPT. Save EVERY PIECE OF PAPER related to your business. If you get audited, the IRS just shows up on your front door step. You must be prepared to quickly hand them all paperwork related to your business unless you want to give them access to your entire house while you search for it. Be prepared to direct them to one file, one series of folders, pour 'em a cup of coffee if they want one and get the hell out of their way while they crunch your numbers.

Shop around for an attorney who specializes in business law, too. I'm a self-employed Graphic Designer who is required to carry a Seller's Permit (even though I don't "sell" a product...it's a long story).

Initially, pay the CPA and Attorney for an hour of their time each. I went to the Attorney's office and we did a conference call with the CPA. Tell them about your business, what you do, what you expect to make, ask any questions and take their advice. It will cost you up front but TRUST ME...as someone who did it...you will be VERY grateful later that you did it.

Good luck!

[hecate77]

3. Consider an LLC

In most states, you can now opt for an LLC. This allows you to take essentially corporate style deductions and also lets you opt out of Social Security completely. All your income is partnership draws, and is thus not in the wage category and not subject to SS.

You will need a good accountant, though. So get one. Your savings will more than pay for all of that. Instead of being paid on 1099s, you will need to be paid via contract. The companies you contract with actually prefer that anyway.

We did an LLC here (CA) and saved at least 50% of what we would have paid in taxes otherwise.

In these days, every penny you can withhold from the criminals in Washington is good. Use their methods against them. They set these plans up so they could get out of paying taxes (Doh!), so you might as well use them.

[Technowitch]

7. Hello there Hecate77 -- and absolutely

(And welcome to DU sweetie. For those clueless, Hecate77 is my same-sex spouse).

The first best thing financially we did was get our butts over to a great accountant.

The second best was to file that LLC paperwork. It's saved us ungodly amounts of money over the last few years.

Plus, I'm with Hecate77 here -- we're trying to keep every single penny we legally can keep, because we're so very opposed to the Repugs' policies.)

[indypaul]

5. Don't overlook an alternative

to CPA by finding a local Enrolled Agent.
Try locating one at www.naea.org

[sundog]

6. get a good CPA

I incorporated, so I do state sales tax monthly and fed quarterly.

Yes, cpa... Find out who some of the local businesses use & get friendliest at the best price. :7

It'll make your life a hell of a lot easier.

[Ernesto]

8. Thanks for the advice

A neighbor just happens to be an accountant/financial planner. I believe I'll give ol' Harry a call!