daughteroftheking1029
New member
I own a pass-through LLC in a creative field with a revenue of about $150k/yr, and ~$20-30k in expenses; no employees, so $120-130k profit. That’s the good part!
The bad part? That doesn’t go as far as it seems with single earner and a big family, healthcare, etc. I get paid in lumps just a few times per year, with the great majority coming in the last quarter. Last year we went in to the red before hitting that last quarter, couldn’t pay quarterlies since we needed the capital to continue, and thus will likely be paying penalties when we file. This has every likelihood of happening again this year, but I want to start digging myself out of that tax cycle. Obviously, I need to unfk my personal finances, but to start, I need to unfk my business finances.
Just like you’d guess for a creative… I’ve gotten lax with bookkeeping: keeping files with misc receipts, sometimes no receipts since getting a dedicated business credit card (just figured I’d use the statement, which I gather from reading…is not audit friendly), and paper invoices. I’ve used business checking for personal purchases, but only save and enter valid receipts for tax purposes at filing time, same with the occasional cash purchase. I do try to learn about tax law and keep clean in “substance”, despite my lack of organization and record keeping.
The structure and accounting is exceedingly simple: revenue from 3-5 different entities, which account for sales tax on their end. Expenses are supplies and tools, travel, shipping, etc.. no contract workers or labor requiring 1099s at this point. No inventory, occasional asset purchases, which the tax guidelines help determine depreciation on.
Revenue should continue growth, but this basic model will very likely remain this simple for the next decade+, possibly indefinitely.
Questions are:
I’d like to start using software to help keep up on bookkeeping so I have a better picture of it during the year, and so tax season isn’t a nightmare. I am not tech savvy, and my desktop stays off weeks at a time. Mobile is preferred. I use turbo tax because my business is simple. I may find my way to a CPA at some point, but at this time of year, I’m guessing I’ll be on my own for this filing. I know QuickBooks integrates with TT, and it seems like most CPAs prefer it when I get to that point. Is it overkill? Can I use a basic version? Will I be able to reconcile the books from 2023 manually or by importing bank statements for instances where I don’t have receipts? (I have so few supply types I can easily tell which category an expense is from the statement alone. I’ll keep all receipts now).
I have read that using the S-corp election for filing taxes may be advantageous at this income level, though setting a reasonable salary in this field may be arbitrary since it’s basically a %100 freelance sector with incomes from negative up to 7 figures. Could I do that for 2023, or doesn’t it need to be structured in advance? Should I plan for it in 2024?
Hopefully I can get on top of it so I can possibly file quarterlies to account for the lopsided timing of my income and preserve capital while avoiding the penalties from missing 1040 ES payments.
Any advice is welcome, thank you!
The bad part? That doesn’t go as far as it seems with single earner and a big family, healthcare, etc. I get paid in lumps just a few times per year, with the great majority coming in the last quarter. Last year we went in to the red before hitting that last quarter, couldn’t pay quarterlies since we needed the capital to continue, and thus will likely be paying penalties when we file. This has every likelihood of happening again this year, but I want to start digging myself out of that tax cycle. Obviously, I need to unfk my personal finances, but to start, I need to unfk my business finances.
Just like you’d guess for a creative… I’ve gotten lax with bookkeeping: keeping files with misc receipts, sometimes no receipts since getting a dedicated business credit card (just figured I’d use the statement, which I gather from reading…is not audit friendly), and paper invoices. I’ve used business checking for personal purchases, but only save and enter valid receipts for tax purposes at filing time, same with the occasional cash purchase. I do try to learn about tax law and keep clean in “substance”, despite my lack of organization and record keeping.
The structure and accounting is exceedingly simple: revenue from 3-5 different entities, which account for sales tax on their end. Expenses are supplies and tools, travel, shipping, etc.. no contract workers or labor requiring 1099s at this point. No inventory, occasional asset purchases, which the tax guidelines help determine depreciation on.
Revenue should continue growth, but this basic model will very likely remain this simple for the next decade+, possibly indefinitely.
Questions are:
I’d like to start using software to help keep up on bookkeeping so I have a better picture of it during the year, and so tax season isn’t a nightmare. I am not tech savvy, and my desktop stays off weeks at a time. Mobile is preferred. I use turbo tax because my business is simple. I may find my way to a CPA at some point, but at this time of year, I’m guessing I’ll be on my own for this filing. I know QuickBooks integrates with TT, and it seems like most CPAs prefer it when I get to that point. Is it overkill? Can I use a basic version? Will I be able to reconcile the books from 2023 manually or by importing bank statements for instances where I don’t have receipts? (I have so few supply types I can easily tell which category an expense is from the statement alone. I’ll keep all receipts now).
I have read that using the S-corp election for filing taxes may be advantageous at this income level, though setting a reasonable salary in this field may be arbitrary since it’s basically a %100 freelance sector with incomes from negative up to 7 figures. Could I do that for 2023, or doesn’t it need to be structured in advance? Should I plan for it in 2024?
Hopefully I can get on top of it so I can possibly file quarterlies to account for the lopsided timing of my income and preserve capital while avoiding the penalties from missing 1040 ES payments.
Any advice is welcome, thank you!