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Do I need an accountant/how much does it cost?

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  • Do I need an accountant/how much does it cost?

    I currently have a W-2 job, and I did a telemed job as a side hustle for the last two months of 2021, making around $14k. Bought a house and car as well. I have been doing my taxes the last several years via TurboTax. I was wondering is my situation complicated enough to where I benefit from hiring an accountant? The one asked would cost >$1000. Not that I don’t value their service, but wasn’t sure I’d gain >$1000 more in tax write offs by using them (was hoping I can write off a car or something like that but they said no).

  • #2
    Was the side job W2, or 1099 ?

    Did you have to purchase extra malpractice for the telemed job, I would bet your regular job would not cover it.

    Did you file all the quarter forms?

    Are you incorporated ?

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    • #3
      Originally posted by Random1 View Post
      Was the side job W2, or 1099 ?

      Did you have to purchase extra malpractice for the telemed job, I would bet your regular job would not cover it.

      Did you file all the quarter forms?

      Are you incorporated ?
      No, my main job was the W-2. My telemed side hustle was a 1099. The telemed job had malpractice coverage.

      I did not file quarterly forms but I did withhold extra tax according to my tax bracket from my main job when I got a paycheck from telemed job (an accountant friend told me to do that). It wasn’t until November that I got a paycheck from the 1099 job.

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      • #4
        Depends how comfortable you are with your taxes. You still have a fairly straight forward return. Do you have any business deductions? There’s a chance you may not have much. You could always use them for a year, create your own return to compare, then go from there.

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        • #5
          I would just try it on my own, you might not have a lot of tax liability , depending on your withholding from your primary job, If you are wrong wiht the taxes, I am sure all the geniuses down in Washington will fix it for you. I would bet trying to write off a car for a telemed job might through off a red flag.

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          • #6
            If you are comfortable with navigating TT and have an inquiring mind, take a stab at TT. Hiring an experienced CPA with appropriate knowledge will beexpensive but should leave you in a better financial position (or at least give you peace of mind and save you stress and valuable time, Don’t try to deduct personal expenses on your sch C (of course!) and determine a reasonable allocation for those that can go either way. If you have a home office, I would strongly lean toward using a professional.
            Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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            • #7
              I would do it myself, but as others have said it depends on your comfort level. For example, it would be easy enough to claim a home office with the simplified method (I do for my real estate business) but you would probably leave some money on the table. You could claim your computer, but not the whole cost if you use it for personal reasons well. Then you have to apportion, etc.

              The real reason I’d try to do it myself is that, as Johanna says, you need to find a CPA with appropriate knowledge. But you may find that hard to do during tax season. And just anyone may not know enough to help. Ask around. Know anyone with a side hustle like yours who has “a tax guy” that saves him money? That might be your best lead.

              Meanwhile, try it yourself. Then find a professional after tax season and ask for a second opinion and tax planning for 2022. If they see savings for the future, great. If not, at least you know you didn’t miss anything. Worth the modest cost.

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              • #8
                “I did a telemed job as a side hustle for the last two months of 2021, making around $14k. “

                What is your intention with the business in 2022 and beyond? Probably the most important question.
                “Don’t try to deduct personal expenses on your sch C (of course!) and determine a reasonable allocation for those that can go either way. If you have a home office, I would strongly lean toward using a professional.”
                You can safely deduct direct expenses and any allocations would be limited to the two month period and probably need a professional to help you set it up primarily for 2022 going forward.
                Might as well resign yourself to extending your return to allow the CPA time to get your process set up. That alone would be worth doing it right.
                The value is not just current tax savings if you are continuing the business. Kind of a startup cost expense.

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                • #9
                  What you have described should be well covered by consumer tax programs. If you want someone to hold your hand, enrolled agents are usually less expensive than CPAs. Unlike CPAs, some of whom are tax experts and some are not, taxes is all EAs do. They are required to keep up to date ON TAXES, not just general accounting CE, which may have nothing to do with taxation.

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                  • #10
                    Originally posted by afan View Post
                    What you have described should be well covered by consumer tax programs. If you want someone to hold your hand, enrolled agents are usually less expensive than CPAs. Unlike CPAs, some of whom are tax experts and some are not, taxes is all EAs do. They are required to keep up to date ON TAXES, not just general accounting CE, which may have nothing to do with taxation.
                    https://www.ais-cpa.com/enrolled-agent-ea-salary-guide/
                    An EA with experience per above makes $60k.

                    EA vs CPA does not necessarily mean that you get better value. The goal is to find an individual actually practices and well in the services you need.
                    100%, CPA does not mean “tax expertise”. Tax is one of many specialties. Choose wisely. Your CPA wheelhouse should meet your needs.

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                    • #11
                      Originally posted by afan View Post
                      What you have described should be well covered by consumer tax programs. If you want someone to hold your hand, enrolled agents are usually less expensive than CPAs. Unlike CPAs, some of whom are tax experts and some are not, taxes is all EAs do. They are required to keep up to date ON TAXES, not just general accounting CE, which may have nothing to do with taxation.
                      100% agree that you should not exclude EAs from your search. As with CPAs, you still need to do your due diligence, some are very knowledgeable and proactive and others are just going through the motions and most in between.
                      Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                      Comment


                      • #12
                        Accountants are very cheap, mistakes are expensive. Don't step over a dollar to save a dime.

                        Oh, and nobody enjoys doing taxes. This is a no-brainer.

                        It is generally unwise to skimp on any professional service. Even if you had W2 and nothing else, a decent CPA will pay their own fee and more by finding a few house or dependent or moving etc deductions for you or a few ideas for next year. A good CFP/CPA is more expensive than a basic CPA... but also much more useful in my experiences.

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