This is a guest post by Karen Orr a stay at home mom to two beautiful daughters with a (currently underutilized) BA in Business Administration ““ Human Resource Management. She considers herself to be the “geek” in the family and enjoys managing the family business, reading, and volunteering her time to lead a group for other moms.
CPA or Not?
I’ve learned a lot about self-employment tax ““ the tax we owe that makes up the portion of social security and Medicare that is typically withheld by employers ““ and estimate taxes ““ the manner in which we pay our self-employment tax and federal tax because it’s owed in a pay-as-you-go tax. If you do not have anyone withholding the right amount of federal tax, such as an employer, than you are subject to making estimated tax payments. It has also been helpful to discover all the things that count as deductions and how to determine our profit from the company. Now, I’m not discouraging anyone from seeking help from a CPA. In fact, I did sit down with our CPA about a month ago just to make sure I was on the right track. I had such a sense of accomplishment when I was able to follow what she was saying, and it was helpful to be guided towards a few things to look out for that I might not have known otherwise. For us, I was successful in utilizing TurboTax for Home and Business to file our return. I feel like TurboTax also pointed out to me many things I might have overlooked. I kind of view TurboTax as my own personal CPA but without the expense. I guess that’s the point though, right? TurboTax wouldn’t be successful if it didn’t help small business owners like us figure out all the ups and downs of filing our taxes.
Here are a few of our findings:
- Small business owners can deduct the full amount of the insurance premiums paid for health insurance
- We bought a laptop to use for our business and we can utilize a depreciation deduction for the next 5 years.
- Our business is a handyman business and all the tools my husband bought to get started were expenses which reduced our taxable income.
I would not necessarily call this post a review of Turbo Tax for Home and Business but I would definitely recommend it to small business owners. I was pleased with the ease with which it pointed me in the right direction and basically give myself a huge pat on the back for successfully figuring it all out. My husband is super happy too, and since he makes a wonderful CEO/handyman, that leaves the position of CFO open for me!
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Love it! I bet it’s nice to put those business skills to use. I’m sure Heath is thrilled to have such an enthusiastic CFO.
Awesome article Karen! I’d love your input for the shop once it gets going, I should hear about the loan by Monday! I have a Business Admin Diploma (basically an AA) from Canada, and the tax law here is completely foreign to me (go figure!). The basics of accounting are all the same everywhere, but the taxes are completely different!
Regardless, thanks for a very interesting article! Loved that info about the health insurance premiums, though I was pretty sure the computer and equipment would work that way for me too!
Congratulations, CFO. Big job you have taken on, and it is complementary to what Heath does, very much. Go for it. Looks like you are all pointed in the direction of right. Keep it up.
Nice post – definitely useful for solopreneurs and small business. I’ve only used TurboTax for personal, and I’m actually switching to H&R Block (in person) because I don’t like that you go into TT thinking you’re paying one rate, and then often because of one tax doc/situation that doesn’t add a lot of tax liability, TT bumps you up to the “deluxe” or whatever package that results in a comparatively much higher total payment. Plus, I don’t like that the mid-level to high fee for TT doesn’t include speaking live to a tax professional about your personal situation — instead you need to wade through a forum of comments with TT’s answers; but I’ve found those are not relevant to my situation.
Thanks a lot Karen for your post it’s fun to have a different perspective here on FiscalGeek.