I have a start up business, its a partnerhip? Should I go to a cpa or can I use turbo tax and do it myself?

Question

I really didnt make much last year from the business but I had expenses on equipment, stationary,promotions to get it going. Is it something I can do myself on turbo tax for deductions or should I go with a cpa to get it right?

Answer 1

Doing a partnership return is a bit more difficult than a individual return. You can give it a try so you know how difficult it will be.

You can download the 1065 forms from www.irs.gov to see what they look like but to undestand all the available deductions (like Section 179 on Form 4562) it would take a while to get up to speed. Turbo Tax can accelarate the learning process.

Also, if you have a small business it may make sense to go to a CPA in order to have an advisor for other things. For instance, payroll and other business related questions like insurance.

Answer 2

I would recommend a CPA and not Turbo Tax. TT is good for simplistic returns, not anything as advanced or involving as what you have. Like the previous person stated, you've got capitalization, depreciation, etc. that you'll have to do. Besides, if you didn't make much, I'm sure you'll want to get the maximum amount of deductions available to you so you can lower your tax liability. Those programs can't talk to you, a person can.

Answer 3

Sounds like a sole proprietorship.

Start up costs can be deductible too. I thought Turbo Tax at first but spend some money on a CPA just to be safe.

Answer 4

Trying to save time in the short run may cost you in the long run. If you're planning on growing the business then you WILL need the services of a CPA eventually. Better to go to them now and get it right AND for them to have the data from the start rather than having them charge you extra because they have to fix something you've screwed up. And it makes it easier for them in years 2-6 which means you get charged less.

They likely will charge you a nominal rate for your return..$500. Worth it to get that out of your hands so that you can concentrate on making yourself money. After all, isn't that why you started the company to begin with?

Bottom line don't try to wear multiple hats unless you have the education to support it. They would hire you if they were in need of someone with your services..because they recognize that you are better at it then they and their time is too valuable to waste training themselves. You should recognize that too.

Answer 5

Before you do your taxes, you should use Quickbooks or another cheap but good accounting program. You need to keep a complete record of the partnership from day one. Quickbooks can automatically transfer all the information to Turbotax saving you the hassle. I agree with a previous answer, you should know something about depreciation and the accelerated methods. If this seems complex, find a good accountant.

Answer 6

You could also try a certified tax preparer instead of a CPA.

Answer 7

Do you know which items you can expense, and which ones you capitalize? Do you know what that means?

Go to a CPA and get it right.

Answer 8

I would recommend starting off with a trusted accountant (one who knows you would like to do all the books yourself in the future).

Trying to do it yourself is a huge "pain-in-the-butt", trust me! :)

A good accountant will set-up the correct accounts you need and teach you how to keep the correct info and where to "file" everything..(you REALLY dont want to piss-off the tax man, cause you dont have an understanding of the tax laws.)

Once you have a couple of years under your belt, theirs nothing wrong with doing things yourself.

Answer 9

This is going to depend largely on how you have it set up. Is it a LEGAL partnership?