General Question

drClaw's avatar

Has anyone had to file taxes as a small business or partnership before?

Asked by drClaw (4437 points ) March 25th, 2009

A friend and I started a small business last year that really didn’t end up doing much. Total revenue was under $10k, there are no employees, and there are no expenses. I hate paying H&R Block to do my taxes, but I don’t want to screw anything up. Does anyone have any advice or at least a good starting point for me to do them myself?

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16 Answers

DrBill's avatar

I’ve been doing taxes for over 30 years, lots of partnerships, corps, etc.

For a first timer, I would recomend taxcut

drClaw's avatar

@DrBill there appears to be a few different versions. We’re based out of Washington and don’t have a state income tax, based on that which version should we buy?

Link: http://www.hrblock.com/taxes/products/software/index.html

SeventhSense's avatar

I have an S Corp. and the benefit of a good accountant I have found to be indispensable. And once you find a good one that you are comfortable with, make a sacrifice to the tax gods for your good fortune. It’s worth every penny. There are three things in busines that are worth more than gold: 1. a good accountant, 2. a good lawyer 3. a good insurance agent And don’t you have to file by March 15? As a corporation I have to do so.
My advice is to put up the few bucks and save yourself the stress and anxiety.

gooch's avatar

I did mine today with taxcut. I have had my own small business for 15 years now.

augustlan's avatar

When I owned a more complicated small business, I paid an accountant to do it. Now I own rental property, but I file myself with taxcut or turbotax.

DrBill's avatar

@drClaw

Tax-cut Home & Business Retails for about $68.72 (tax deductible) at Sam’s. Includes unlimited personal, C Corp, S Corp, Partnership, LLC, non-profits, estates, trusts.

I have 2 C Corps, 3 partnerships, 1 NFP and an LLC and can do all them with the one program.

@SeventhSense
C Corps do have to file by March 15, but S Corps and partnerships are due by April 15.

SeventhSense's avatar

@drClaw
Yes my error I have a C corp.

drClaw's avatar

Thanks for the great advice everyone, it sounds like taxcut is the way to go for a business as small as ours.

SeventhSense's avatar

@drClaw
Is it a sole proprietorship? Seems pretty straight forward plus itemized deductions. How do you have no expenses though?

marinelife's avatar

Are you sure you have no expenses? Do you have office space in your house? Did you buy any equipment, mail anything, put in a new phone line, join a professional association?

If you actually have a partnership, the rules are different for that than for an S corp, C corp, sole proprietorship or LLC.

drClaw's avatar

@Marina & @SeventhSense it is a partnership and I was wrong we do have one we do have one expense: a home office. Besides the home office there are no expenses, both me and my partner spent last year working on other projects which led to small money and even smaller expenses.

Sorry for grammar I posted this on my phone.

DrBill's avatar

@drClaw

If you were my tax client, you would have deductions even if you had no expenses.

drClaw's avatar

@DrBill need a client?

drClaw's avatar

OK so my partner and I bought TaxCut Business and got through everything very easily. The only problem we have now is a minor warning (the blue kind) that says “Withdrawals & Distributions – Cash – Federal amount is not equal to allocated K1 amounts please review” besides this we are done with taxes until next year. If anyone familiar with this program has any insight into what this error means I would be eternally grateful if you passed your knowledge on.

Thanks everyone for the help

augustlan's avatar

Did you click on it to see what the more detailed explanation was? I’m not familiar with that one, so that’s the only advice I can offer. Sorry. :(

DrBill's avatar

Most common:
If you have (for example) 2 partners at 50/50, the amount they took out of the business must be equal. if they are 60/40, their withdraws must be 60% and 40% of the total respectively.

2nd likely cause:
the total of the withdraws from the business does not equal the total of the partners K-1 amounts.

I welcome new accounts, but I advise for free.

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