Tax Time, What’s Your Experience?

As I write this, it is February 21st which means you should have all of your tax forms in hand.  Like many Vermonters, I am not a tax expert, but I like saving money and figuring it out myself, so I use TurboTax.  I have no professional advice to offer, but I imagine my experience is not all too different from other small business owners.  This year I have to file for two businesses, one that is a two-member LLC filing as a partnership, and another that is an LLC filing as a sole proprietorship.

The first obvious thing I noticed is that it is really that much more difficult to file for a partnership.   If you use Quickbooks and TurboTax (both made by Intuit), importing the information is much easier, but you still have to fill out your K-1’s, 1065, and any forms connected to the 1065 (like f1125a for inventory and Schedule B1).  I am lucky enough to have an uncle who knows taxes, and believe his name is actually “Uncle Sam.”  Last year we spent a few hours over the phone filling out the K-1’s and 1065 by hand.  This could of course be done through TurboTax, but I bought TurboTax Deluxe and to get those forms inside of the software you need to purchase TurboTax Business.  I saved about $100, and received just a wee bit of stress.

paper work

Once I filled out all the appropriate forms, I had to enter the information manually into TurboTax.  This was not too difficult, because all TurboTax needs to know is the income reported on your K-1.  You will need to send in all the other forms you filled out by hand, so you cannot file electronically.

For my sole-proprietorship, it took me about five minutes to fill out all of the information (truth be told I was only in business for two months of year).  All I had to do was import my data from Quickbooks, answer some questions and I was done.  Simple.  It makes me want to ensure that I never have another partnership.  As great as it is to work with people, taxes are annoying.

For those of you looking for some tax help in Vermont and elsehwere, here are some opportunities:

1)      Localvore Today is offering a deal for Tax Consulting ($75 for a $300 value)

2)      For a list of sites to get free tax preparation, go to this link to the Vermont State Department of Taxes and open up the Excel document at the bottom.  (note: this may not be free if you own a business)

3)      The IRS offers a Virtual Workshop for small business owners.

What do you use to prepare your taxes?  Do you prefer to hire a tax professional?  Is it worth the money?

About Matt Tucker

Matt loves teaching people about business because he believes everyone should have the opportunity to try working for themselves. He owns Small Systems Consulting where he builds websites, sets up accounting systems, creates business plans, and consults with small food businesses in Vermont. Aside from the business thing, Matt enjoys cooking and all things food, explores creative writing as a hobby, grows food, plays soccer, and is hooked on squash- the sport. Website: www.smallsystemsvt.com/ | Twitter: @SmallSystemsVT

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