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Accounting question

 
Old 02-07-2019, 05:21 AM
  #1  
J S Machine
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Default Accounting question

I am in the middle of doing my taxes for last year, and I have a simple question. The real plan is to get to the point where i can actually afford an accountant. Until then, I will be doing my own taxes for personal and my small business. I did them last year and they were not too bad. I have used Turbotax for about ten years, so I found TurboTax Self Employed and used that. Everything worked ok. Since I used that, they offered me Quickbooks self employed free for a year as well. It has worked great for the past year, when I have remembered to input info into it. I am currently in the process of trying to decide to continue to use it or not, because in April I will begin being charged monthly for it. All my accounts are integrated into it and it seems to be helpful, but I am just not sure if I might be just as well off using a spreadsheet. I already keep up with a bunch of stuff in a spreadsheet anyway.

Anyway, the question is this. I have a ton of expenses I am trying to record. I have receipts for most of them. I printed statements from all of my spending accounts, and discovered a bunch of purchases that I had forgotten I made. Is a statement from my accounts for certain purchases as good as the actual receipt from the purchase?
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Old 02-07-2019, 05:28 AM
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Paper Receipts ? What is this ? The 80s' ? Somebody make make a Mix Tape.......


Last edited by 03 A/E Coupe; 02-07-2019 at 05:32 AM. Reason: Ask that guy Spinning the Cardboard Sign pointing you to the Tax Place ?
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Old 02-07-2019, 06:04 AM
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Trapper Sean
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If you don't plan on getting audited, then you won't need receipts.
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Old 02-07-2019, 06:53 AM
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If you are audited, a list of receipts will not support the expense. You need receipts to substantiate the list. I don't know how much quickbooks will cost monthly but it is a go to accounting tool for small business.
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Old 02-07-2019, 07:25 AM
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when new quickboks versions come out, you can usually find an older version cheap. heck even new versions are only a few hundred. I would buy it verses leasing their services. we are only talking about 2-300 bucks.

Last edited by flange; 02-07-2019 at 07:26 AM.
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Old 02-07-2019, 07:28 AM
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Old 02-07-2019, 07:46 AM
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just plug in a lot of high expense numbers and low income
you're never going to get audited until you get into the $500K AGI range anyway
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Old 02-07-2019, 08:35 AM
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Copies of all business paper should be kept. I scan all into computer for easy access, then put in a file folder. I just upgraded my QB and got the disc as I keep it on more than one computer.
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Old 02-07-2019, 08:37 AM
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Originally Posted by KarlK View Post
just plug in a lot of high expense numbers and low income
you're never going to get audited until you get into the $500K AGI range anyway
lol. I know several guys who got audited and only made around 300-350.
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Old 02-07-2019, 08:40 AM
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Originally Posted by flange View Post
lol. I know several guys who got audited and only made around 300-350.
they did something wrong, claimed home office deduction?, ....


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Old 02-07-2019, 08:41 AM
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Originally Posted by flange View Post
lol. I know several guys who got audited and only made around 300-350.
My 2016 Federal return got audited, I made less than $200K that year.
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Old 02-07-2019, 09:09 AM
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Originally Posted by PKguitar View Post
My 2016 Federal return got audited, I made less than $200K that year.
I am sure the IRS has you on their list as a trouble maker
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Old 02-07-2019, 09:19 AM
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Originally Posted by PKguitar View Post
My 2016 Federal return got audited, I made less than $200K that year.
having rental properties and rental property related expenses trigger an audit?
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Old 02-07-2019, 09:29 AM
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Originally Posted by Humanoid 2.0 View Post
I am sure the IRS has you on their list as a trouble maker
Apparently wood chippers and lawn sofas are not deductible expenses.
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Old 02-07-2019, 09:40 AM
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For no more money than one of those crates at Staples and a box of Pendaflex folders you can set up a filing system adequate for a one man operation. A spreadsheet would be fine, there's absolutely no need to pay Intuit the ransom on their software. But what appears lacking for you is a diligence to deal with the paperwork regularly so it doesn't get overwhelming. Do it weekly at a minimum. If you must, set an alarm on your phone that's recurring, and deal with it. I do that for a number of things and it's quite helpful. The other option is like Flange says, buy quickbooks. Don't do the monthly thing. But, without some experience with it, you're likely to set it up in such a way as to need to get the updates. There's ways around that (without losing any functionality). Mostly that's for payroll, so if you're not doing W2 wage statements and checks, don't worry about it. Buy once, and you're set.

As to the question, yes, keeping the receipts is highly recommended.
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Old 02-07-2019, 10:18 AM
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They have apps now where you take a photo of your receipts with your smartphone and it categorizes and files them for you for tax purposes.

Last edited by Humanoid 2.0; 02-07-2019 at 10:20 AM.
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Old 02-07-2019, 11:30 AM
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Originally Posted by Humanoid 2.0 View Post
They have apps now where you take a photo of your receipts with your smartphone and it categorizes and files them for you for tax purposes.
I have no interest in google having that information.
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Old 02-07-2019, 11:35 AM
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Originally Posted by KarlK View Post
having rental properties and rental property related expenses trigger an audit?
No, all about my schedule D.

I know it sounds "rare" when you read that half a percent of returns get audited in a given year, but that means that 1 in 200 get audited. I'm sure that almost all of the people I know make between $100K and $500K per year, so if I know 200 families, that means in any given year, someone I know is likely getting audited. It's really not as rare as people think.
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Old 02-07-2019, 11:38 AM
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Originally Posted by Humanoid 2.0 View Post
I am sure the IRS has you on their list as a trouble maker
Federal, I doubt it.

I was definitely on some kind of "watch" list for NJ for a while though. They said I made an error, but I proved them wrong. Then, the next year, I did make an error and paid additional tax with interest. For several years there, I was getting some kind of question from NJ almost every year. I seem to have now worked my way off of that list.

Federal IRS does request further proof of my tuition payments EVERY year though. I have provided the documentation, and it has never been a problem. I don't consider that getting "audited", and I know several people who get the same requests.
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Old 02-07-2019, 11:46 AM
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Originally Posted by J S Machine View Post
I am in the middle of doing my taxes for last year, and I have a simple question. The real plan is to get to the point where i can actually afford an accountant. Until then, I will be doing my own taxes for personal and my small business. I did them last year and they were not too bad. I have used Turbotax for about ten years, so I found TurboTax Self Employed and used that. Everything worked ok. Since I used that, they offered me Quickbooks self employed free for a year as well. It has worked great for the past year, when I have remembered to input info into it. I am currently in the process of trying to decide to continue to use it or not, because in April I will begin being charged monthly for it. All my accounts are integrated into it and it seems to be helpful, but I am just not sure if I might be just as well off using a spreadsheet. I already keep up with a bunch of stuff in a spreadsheet anyway.

Anyway, the question is this. I have a ton of expenses I am trying to record. I have receipts for most of them. I printed statements from all of my spending accounts, and discovered a bunch of purchases that I had forgotten I made. Is a statement from my accounts for certain purchases as good as the actual receipt from the purchase?
The real question is can you afford to NOT have an accountant.

The cost of a PROFESSIONAL to do your taxes can save you SEVERAL TIMES what their fees are.

For years, my father did the personal taxes for him and my mother. My dad was a controller all his life, so he knew his way around bookkeeping and accounting.

Then one year, he decided to have an CPA do his taxes, this was back in the early 80's, and it cost him $125. He had already prepared the forms himself as he wanted to see how he did in comparison to a pro, and even after paying the CPA's fee, he saved over $500 in taxes over what he prepared himself based on his knowledge and background.
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