The Small Business Tax Help Blog

Posts Tagged ‘finance’

Question: New Years Resolution: Save money rather than spend and get into debt: any free spreadsheets out there?

im not talkin about loans on a house or condo, just loans on stuff other than land/houses/condos. (My partner and I own a condo and are making more than the required minimum payments on our mortgage) Are there any good websites or spreadsheet templates on the net that itemise your goal for you on an annual basis? I want to get rid of my credit card debt of $12k and save enough money to start a small business (my partner doesn’t know about either of these otherwise he would explose). I would still work in my crappy job so my expenses are covered and to have an income stream…just that I want to pay off my credit card debt without my partner knowing and then start a small business and tell him when the business is off the ground. So I need the spreadsheet for both these things.

Answer: www.msn.com used to have many spreadsheets for use for free. Or try www.money.com

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Question: I need help choosing the best accounting software.?

Hello! I am a small business owner, married, and have a full-time job out of the home. I want to get accounting and invoicing software for my businesses. I have a freelance writing and editing business and a jewelry and accessories business. I would like the software to allow me to create customized invoices and quotes, track payments, show where money is going and coming from, organize charges for tax purposes, allow me to print and email the invoices and quotes, organize my clients and customers’ information, easy to use, and not too expensive. I would prefer one software package rather than two to do both the accounting and invoicing. It can be any brand as long as I can download it. I would like only software(s) with a free trial to see if it is for me.

Any input, suggestions, etc. would be greatly appreciated.

THANKS!

Answer: It’s not exactly what you are asking for, but Quickbooks is the way to go. Yes, it’s a little expensive and takes some time to learn. But it’s full-featured. It can handle anything you are doing now or wish to do in the future. It has all the features you want.

You basically can’t get full-featured software that is ‘easy to use’ and inexpensive.
I know – I’ve tried many different accounting programs. Eventually, you will want to enter a transaction and the cheap software won’t have the required feature. As an aside, tax laws and tax tables change every year, so whatever you buy if you are planning to use it for tax purposes will need to be upgraded to the new tables each year. And yes, you have to pay for such updates.

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Question: Can I write off business expenses incurred before the business was established?

I plan to file the paperwork to start either an LLC or INC later this month for a web-based business. (I’m still researching which will work best for our situation.) But, I’d like to get started on the web development immediately. If I buy web hosting, domain names, web software, etc. today, can I still write it off as a business expense after I’ve officially created the business?

Answer: Yes. You can pay for it personally, then “reimburse” yourself from the company. Keep all the associated receipts with your business records.

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Question: Tax question (self-employed)?

I realize this is grossly oversimplified, but I’m looking for a very very approximate estimate.

I am self-employed, I have no employees and minimal business expenses. About what percentage of my income will I owe in taxes?

Answer: That depends entirely on the amount of income you have earned. It could be a fairly wide range from 0% to over 30%.

But to give you an idea lets say you earned 50,000 of self-employment income, are single and used standard deductions.

You would have 7,650 of self-employment taxes and 5,394 of income taxes (accounting for a deduction of 1/2 of SE taxes)

Total tax would be $13,044.

This represents an effective tax rate of 26%

This is a higher effective tax rate from a person employed by someone else. Assuming everything else was equal, that person would have 3,825 of employment taxes and 6,350 of income tax.

Total tax would be: 10,175

This represents an effective tax rate of 20.3%

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Question: Can i give my subcontractor a company credit card for any of my business expenses?

Can i give my subcontractor a credit card to pay for my business expenses? Or would doing this clasifiy him as an employee?

Answer: He could still be a subcontractor. The IRS has rules to disallow some people if you treat them like an employee.
As long as you don’t do things like schedule his time or having him work exclusively for you, allowing him a company credit card shouldn’t matter.

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