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Self Employment, Taxes

Mmmm... Cocks...Mmmm... Cocks... Registered User regular
I had a self employment job kind of land in my lap (I'm taking care of a friends grandfather). And so now I need to file as self employed.
I guess I need to find a CPA (certified public accountant?) and there's a ton in the area. I'm hoping to pay my taxes, maybe claim a few things, and hopefully toss some money into like.. a retirement or maybe a LLC.
Is there a particular type I should look for? Certain certifications? A lot of their websites don't seem to say too much, but I'm also not hugely sure what kind of questions I should be asking, or the ballpark price I should be looking at paying for these services.
I live in PA, work in DE if it matters. I feel completely in the dark.

Posts

  • zepherinzepherin Russian warship, go fuck yourself Registered User regular
    edited April 13
    I had a self employment job kind of land in my lap (I'm taking care of a friends grandfather). And so now I need to file as self employed.
    I guess I need to find a CPA (certified public accountant?) and there's a ton in the area. I'm hoping to pay my taxes, maybe claim a few things, and hopefully toss some money into like.. a retirement or maybe a LLC.
    Is there a particular type I should look for? Certain certifications? A lot of their websites don't seem to say too much, but I'm also not hugely sure what kind of questions I should be asking, or the ballpark price I should be looking at paying for these services.
    I live in PA, work in DE if it matters. I feel completely in the dark.
    A lot of things. CPA is certified public accountant and that is a way to go if you are looking for someone to handle your taxes. Working in one state and living in another requires some state level taxes, and I believe PA does not have a recipricol tax agreement, which gets really weird. You end up doing taxes in one state and taking a credit in the other.

    Make sure they are CPAs, and PA, and DE should have individual licenses. You’d want a firm that is licensed in both places, preferably.

    LLCs are fine, they can limit your liability, but that honestly depends on the assets you have. The events that you are trying to protect yourself against an LLC likely won't.

    zepherin on
    Mmmm... Cocks...
  • IrukaIruka Registered User, Moderator mod
    edited April 14
    CPA aside, If you aren't making a whole ton, I've had a decent amount of success paying my taxes quarterly through self-employed QuickBooks, which feeds right into TurboTax. However, I dont work across state lines and Texas does not have a state income tax, which simplifies things a bit for me.

    The most valuable thing about QuickBooks is it automatically tracking your income for easy record keeping, and calculating what your quarterly taxes should be so you can stay on top of that. Paying quarterly will prevent you from owing huge chunks at tax season which can quickly become a financial burden (and is subject to small penalties), and you don't want to be fucking around with the IRS if you want a low stress life.

    The record keeping was also extremely important when I went to purchase a home, as you'll need a few years of recorded stable income as a contractor. Something to keep in mind for your future self. I started using it from the very beginning and was thankful I had, because that sort of thing is tough for a non-W2 worker. Personally, even though we are probably going to move to needing a CPA after getting married, for filing together, I will probably still pay for QuickBooks for my own record keeping, as the visibility is just useful and calculating quarterly is otherwise a pain.

    Iruka on
    zepherinMmmm... Cocks...
  • GdiguyGdiguy San Diego, CARegistered User regular
    Hiring a CPA for the first year to give you an example isn't a bad idea, but we've done ours ourselves dealing with my self-employment (consulting) most years (outside of one year with a crazy wage overpayment issue)... it's not actually that bad at a basic level (literally just a couple more schedules that deal with self-employment taxes, as you wind up having to pay the social security and medicare taxes that are usually dealt with by the employer)

    For investment, you want to look at a SEP IRA - it's very simple to set up and contribute for a self-employed (and you don't need an LLC/etc set up to do that, I have one through Vanguard). It does make the taxes slightly harder (as there's a circularity where you need to do your taxes, then you can calculate how much you can contribute, then you have to redo the taxes incorporating that), but not super challenging.

    The deductions are where you get into questions, and that's also where the legal lines get a bit more hazy - my experience is that a lot of self-employed people deduct housing expenses / etc in ways that are likely technically illegal but in reality the IRS rarely pursues, and what a CPA suggests you do there is also going to vary based on whether they're trying to err on the side of safety or maximal deductions

    ElvenshaezepherinMmmm... Cocks...
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