Hello,
Being close to the end of the year it’s coming up on tax season! Everyone’s favorite! This is my first year in business as a home inspector. Do people recommend a specific account that has experience with home inspectors, or is that not important? Also, is it recommended to have one that has a physical office you can go to, or is over the phone relationship just as effective. Thanks for the help!
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A lot depends on your business type (LLC, S/C-Corp, Sole Prop., etc.) but generally any accountant should be able to help you. I’d probably start by phone interviewing a few to find a good fit. I’ve worked with several over the years and they all seem to have some pros and cons.
On your end the main thing you’ll need to do is bring them a reconciled checking account for the year (Quickbooks, etc.) along with credit card statements, vehicle mileage and a few other things they’ll ask you about.
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That makes sense. Right now I am a sole proprietor. In your experience, did it seem to have a local account, or was one you could phone work just fine?
Are you keeping your own books? If so, how did you decide on your chart of accounts for your general ledger?
If not, you would do well by becoming involved with the book keeping as part of a basic understanding of your business accounting.
A knowledgeable accountant is important for many additional reasons, and can get you going in the right direction. I would use and develop an in-person relationship for long term success.
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I’ve used an Accountant/Tax Attorney since day one. He gave me advice on how to structure my business when I started, has helped me with any questions I’ve had through the years and also does my taxes every year.
I don’t think there is any specific type of accountant for home inspectors because, for the most part, the laws apply the same across the board to all service type of businesses.
If I were in your shoes and just starting up, I would shop around for a good accountant.
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I am keeping my own books at the moment, looking for someone to help with filing that knows the ins and outs of tax law. I deciding on how I was taught growing up with spreadsheets and organization. I’m sure there is a more sophisticated way to keep them, it’s just what I’m familiar with. I appreciate your input!
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Is your accountant local? I used to have one when I ran my window cleaning business, but when I moved to Cleveland, she didn’t take long distance clients, and now I’m trying to find another.
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Yes he is local (Cincinnati), I would recommend a local accountant due to the fact that state & local tax laws will most likely be different than other areas and a local accountant will be up to date on the never ending changes.
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That makes sense! Is your accountant also a tax attorney, or are those 2 separate people you have? I guess I’m. not familiar with what a tax attorney does if you aren’t in tax trouble.
I have an tax accountant for my tax filing and a book keeper to reconcile my bank accounts and code my entries. Both are local and I spend face time with each once or twice a year.
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He’s both an accountant and a tax attorney. His business partner used to do my Mothers taxes going back to the 70s and was actually a family friend through my mom’s church, he helped me set up my business then retired the following year, his partner, who is an accountant and a tax attorney then took over the business so I just stayed with him and have been very happy with his services, I just hope he doesn’t retire before I do.
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Austin, if your keeping your own books you could probably get away with a tax person simply doing your taxes.
In Maryland there is no tax on services so this makes it much simpler. I keep three “books.” The ledgers are titled General, Income and Expense. General just keeps every entry by date and address. This includes expenses listed by date and store. Expense page justs lists the expenses by date (must match the general ledger) and they are separated by the categories allowed as deductions in your federal income tax (Advertising, Fees, Insurance, Office Supplies, Tools, Continuing Education, Professional Dues). Income has all the moneys collected (credits) listed by date and separated by service provided (Radon, WDO, HI whatever). This process is known as double entry (each item is listed in two separate ledgers).
At the end of the year all your books should have the same entries and totals. I take them (totals) to my tax lady and she does my taxes. You should of course be paying taxes quarterly so you may owe or get a refund. My personal preference is to owe. Otherwise I’m lending the government money interest free.
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I forgot to mention mileage. On the page adjacent to my General ledger entries I list all my mileage (start, arrive, return, and total trip). The total trip sum (for the year) is what you need at the end of the year. They also want the beginning mileage and ending mileage.
I use Excel for all the entries. The three “books” are tabbed at the bottom of the page. Very simple! At the end of the year I close it out and start another.
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If you don’t have anything real complicated going on financial wise, I recommend giving it a go yourself. Small business (especially sole proprietor/single member LLC) taxes are extremely easy for even the novice to do if using one of the tax software options out there.
The software typically uses an interview type format that makes it very simple to use. Try it out, worst case you stop and go see an accountant.
Here’s the software I use…
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I’ve always had a local one and that is probably best. I suppose these days things can all be done electronically but I do like the ability to talk to him in person and hand off the physical copies of my bank statements and other stuff. If your immediate area is of any size you should have no problem finding one close by.
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Bookkeeping is one thing. It’s simple and just a matter of making entries at the appropriate time. The advantage of having someone else do your taxes is that any errors will not be charged back to you.
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Since I keep all of my records I have been doing my own taxes for years. Nowadays there are so many modern ways to file your taxes online, the same the majority of tax preparers use, all you need to do is fill in the blanks.
I have used tax preparers and had an accountant in years past. But after doing it myself I found out I can save just as much money, if not more, then they have.
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I’ve been using Turbo Tax Home & Business for over 20+ years and never had any issues so far. Like you said, it too, walks you through the whole process for both your business taxes and personal taxes. My tax reporting is not complicated because the wife and I are both self employed, don’t have any investments that draw income and nothing else that would need special attention that a tax professional would need to decipher. If that time were ever to come, I would consult and hire an accountant.
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Yep, how motivated will an accountant be to make sure I’m getting every tax break possible? I can guarantee they aren’t as motivated as I am!
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A little tip if you are going to buy one of the popular tax software options. You probably don’t need to take advantage of the upsells to the “higher level” editions. Try doing what you need with the lower level version, you can always upgrade if you need more features. Even the most basic “level” should handle 80-90% of situations.
Here’s this years options from the vendor I buy from. I always buy the Deluxe + State. I do two businesses and multiple investments with this version. I could probably do what I need with the basic version, but after you add the state to that version it’s basically the same price as Deluxe + State anyway.
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