Posted by Kathryn on 4/13/12 11:48am
Msg #417807

Filing Taxes

I searched messages and only found some older posts on filing taxes. Any new suggestions this year ? I moved away from my CPA and am debating on doing the taxes myself.
I am nervous because I had such a pay cut from moving ... didn't work for 4 months. Hope that won't red flag me.
If anyone is willing to speak with me please message me and I can call you if you have time ! Thanks and God bless You!

Reply by Luckydog on 4/13/12 12:39pm
Msg #417814

I moved away from my CPA as well, but I send him my paperwork registered in the mail, he takes care of it, efiles for me, and mails it back. He is familiar with my deductions being a notary, and I have a great system and log entry pages, making his life extremely easy. Every month I have a file for expenses, paper, toners, computers, and even the cell phone bill and home phone fax charge on my cable and internet. Everything is there itemized monthly. I do not need to sit with him, explain anything, and works out great. Sometimes sticking with the" tried and true" as being an independent contractor is better than raising red flags doing it yourself, and risk getting looked at.

Reply by Luckydog on 4/13/12 12:41pm
Msg #417815

Deadline is April 17th, so your running out of time. I would file for an extension on line at this point.

Reply by bagger on 4/13/12 1:43pm
Msg #417818

Good records are the answer to any IRS problems. And, it can be accomplished via a very simple Excel spreadshhet.

Reply by Mike Goodey on 4/13/12 2:27pm
Msg #417827

It's not that difficult. The self employment tax owed would be the difference from what you made and the number of notarizations you did...and what can be charged for those notarizations.

Reply by JanetK_CA on 4/13/12 7:40pm
Msg #417877

Mike, your statement about number of notarizations is potentially misleading and could get someone in trouble. The exemption from self-employment taxes should be calculated per assignment. You can't exempt more than you're being paid PER ASSIGNMENT.

So in California, if you have 10 signatures notarized and you're paid $100, no problem, you break even. But if you have 12 signature notarized, you can still only exempt $100. You can't roll over the two extra signature to a different assignment where you might have only had 4 notarizations. Well, I suppose you could, but it won't hold up in an audit.

Reply by KODI/CA on 4/13/12 2:59pm
Msg #417833

If you are going to do it yourself, here are 7 red flags.

1. Schedule C
2. Over the top deductions.
3. Business or Hobby? (making or loosing money over a 3 year period).
4. Rental Losses.
5. Business use of a car.
6. Home-Office Deductions.
7. Earned-Income Tax Credit (taking it when you are not eligible).