I'm venturing ever further into the world of self-employment, and I need to talk to an accountant before I go much further. I'm sold on that. I made as much from six hours work last week as I did from my day job, and if that's going to keep up (Please!) I need to know how to account for the income and pay the taxes correctly.
Everything I've read says that I need to make sure I find a real accountant, not just some guy who is competent to fill out your 1040-EZ for you. That makes plenty of sense, of course, but how do I tell? Obviously I don't just walk in to H&R Block, but that's as much as I know. If it makes any difference, I'm located in the USA in the state of Indiana.
A couple of possiblities: 1) Check with you local Chamber of Commerce. There are sure to be a few CPA/accountants as members. 2) Strike up a conversation with a local small business person (Car mechanic, florist, toy store, realtor). Ask them who they use.
When you have a couple of names - call and ask for an introduction session. You should be comfortable with them before you hand over your tax information.
dingman, I've been self-employed for 30 years now, but I am no expert. I no longer use an accountant, but when I did I looked for a CPA in my town and after a few years I decided I could do it myself. I do get advice from time to time and I looked for an accountant that used QuickBooks so I could take him a disk of what I had and ask the questions I needed help on. If you have extra deducted from your day job check you might be fine this year. You may have to start filing quarterly returns on your extra income to avoid any penalties or interest.
Tax is a game - do you have time to learn the rules of the game and beat the inspectors at their game?
If yes, DIY.
If no, get the best accountancy firm you can find (Chartered in the UK, do not know the USA equivalent). They should save you at least 3 times what you pay them. Donít be afraid of checking out new firms from time to time if you think the company you appoint is not saving you as much as they could.
So it's a win win situation for you.
N.B. never use a company that ďbends the rules too farĒ. They will have a little black mark by their name and only means problems for you some time in the future.