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Throw me a bone, How do you find a good accountant?
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qfanatic01
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Joined: 21 Oct 2009
Posts: 768
Location: Champlin, MN

PostPosted: Sat Aug 18 12 2:13 pm    Post subject: Throw me a bone, How do you find a good accountant? Reply with quote

I finally got my paper work turned into the accountant after filing an extension. I wear too many hats and need at least another 24 hours a week to make ends meet. Anyway, he tells me I will owe taxes even though my end balance was close to the beginning. We cleared our debt last year, or year four of our business. We started with two 20,000 dollar loans. If I can't save a buck to reinvest with out Uncle Sam or a bank taking a percentage of it, my business would grow faster. I shouldn't be taxed unless it's taken out of the company!! My small business created 15 tax paying, part time jobs this year no thanks to anyone but me. He tells me the debt I payed off was considered profit. WTF Those were expenses I had to borrow money to pay. If it takes you more than three years to pay them off you loose the credit? You wonder why this country is in the financial crisis it is? I want to buy a building and start investing in retirement, but if I save money for a down payment I will be penalized 20% by the government for good business practices. The banks won't loan you money unless you already have it. I wouldn't need to borrow then. The government makes more from my business than I do and I haven't seen one of them here working all night. I have an appointment with the accountant Monday, I hope he can shed some light on this and help me strategize to make my money grow my business with all my income, thus creating more jobs. Not that the service industries low income jobs are the answer to long term economic stability. We need to manufacture more than housing , food and entertainment. Sadly, I'll be lucky to retire.
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Last edited by qfanatic01 on Mon Aug 27 12 8:59 pm; edited 2 times in total
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JAllen
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Joined: 27 Oct 2010
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PostPosted: Sat Aug 18 12 5:43 pm    Post subject: Reply with quote

qfanatic, I feel for you.

With that said, BOHICA.

I'd say more, but this is a non-political blog; and you've said it pretty well anyway.
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Ridge View BBQ
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PostPosted: Sat Aug 18 12 8:19 pm    Post subject: Reply with quote

We formed our LLC in 2007,and I have said it over and over again...It would be much less difficult to quailify for welfare then to start your on business...
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tonyg
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PostPosted: Sat Aug 18 12 10:50 pm    Post subject: Reply with quote

I'm in nearly the same boat Charlie..
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jd of de



Joined: 28 May 2009
Posts: 8

PostPosted: Sun Aug 19 12 1:17 am    Post subject: Reply with quote

If your accountant hasn't explained a p&l statement and general rules of taxation to you it's time to get a new accountant.
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Geronimo
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Joined: 29 Jul 2007
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Location: Montgomery, Texas (and lovin' it)

PostPosted: Sun Aug 19 12 3:55 am    Post subject: Reply with quote

jd of de wrote:
If your accountant hasn't explained a p&l statement and general rules of taxation to you it's time to get a new accountant.


You hit the nail right on the head. Sit down with your tax person (preferably an accountant that knows the food business) and see EXACTLY where you stand.

As a caterer I had very little over head but there were times (off season) it "seemed" I wasn't making ends meet. But after a trip/visit to my accountant, he made it clear that I was making a killing (so to speak) over a years period.

Being a one man show, I was only scratching the surface of what the possibilities were for attracting business.

One can only do so much by yourself no matter how hard you try.
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camdentom
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Joined: 22 Feb 2007
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Location: St Peter, Mn

PostPosted: Sun Aug 19 12 9:26 am    Post subject: Reply with quote

Hey Qfan, things can't be that bad. I rode my bike through your parking lot last night and saw 4 Southern Prides sitting there.
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qfanatic01
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Joined: 21 Oct 2009
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Location: Champlin, MN

PostPosted: Sun Aug 19 12 9:56 am    Post subject: Reply with quote

I've never been in this situation before and I'm not complaining about making a profit. And I well understand the deal. My first business was never in the red. I took over a bankrupt company and had positive cash flow day one. It was mismanaged. I walked away due to health issues, within a couple of years of paying off my house at the rate things were going. My beef is that if I don't spend it immediately, it seems the government takes a 20% cut. They can have a % of my draws / income, which should be a flat tax for all. My company should be able to make some long term investments, just as many have 401Ks. I can keep investing in equipment and not have anything left for them, but what I have works fine. My biggest problem today is that I paid off 30k in debt and it's being taxed as profit. That debt was for expenses. I could understand it if I was taking it out of the company, but I didn't. I worked over 2 years with no compensation, except food. We risked everything to turn this corner. Like I said, I would like to use the business I built to create a secure retirement income, which would be taxed as I take the draws, by purchasing a building to run my business out of. When it is paid off I plan to use the rent money as my retirement income. Assuming I can continue to run a solid business with management. I think your business should be able to have working capital without having it taxed as profit, whether we are making a killing our not. Profit should only be what you take out of the company. Like I said, I will see Monday, but my accountant said the payoff of the notes was considered profit. I will get clarification on the general rules of taxation, but if my businesses working capital or growth is not sheltered like a 401K or other retirement tool that is not fair. I hope I am misunderstanding this, but if this is correct, they aren't making my own small business a very good investment?? Our country's solution to our economic woes is through the growth of small business!! I plan on growing my business until I die or retire. When I'm dead the government can take their cut from my kids.
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jd of de



Joined: 28 May 2009
Posts: 8

PostPosted: Thu Aug 23 12 8:07 pm    Post subject: Reply with quote

I certainly don't mean to be mean here, but I will be direct. You need a new accountant, because you have far more ways to avoid or defer taxes than the smuck working for someone down the street.

That guy working for someone else can't stockpile the 1st $50k in income, but you can. That beats the hell out of his 401(k) any day!

Your business is the best vehicle government invented to avoid or defer taxes. But if you don't invest in a good accountant you'll never see the benefits.

Get a good accountant and when he tells you what you have to pay in taxes pay it. Freedom isn't free.

You are wasting valuable time you could be using running and growing your business; and enjoying life. Not once has a accountant ever cost me more that what he saved me.
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YardFullOfOak
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PostPosted: Fri Aug 24 12 4:29 am    Post subject: Reply with quote

qfanatic01 wrote:
My biggest problem today is that I paid off 30k in debt and it's being taxed as profit. That debt was for expenses.


Well, those expenses were tax deductible when they occurred. (Or in the case you refer to capital expenditures that are activated on the balance sheet, they will be deductible as depreciation).

If you were able to deduct the expenses both when they occurred and when you pay down the debt, you would deduct them twice.
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qfanatic01
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Joined: 21 Oct 2009
Posts: 768
Location: Champlin, MN

PostPosted: Fri Aug 24 12 1:43 pm    Post subject: Reply with quote

I didn't look at the replies until tonight. I haven't heard anything about stock piling 50k from my accountant. How's that work? I spent much of the profits this year on remodeling and stock piling two of those smokers in my parking lot so we can put them in through the wall and I don't have run out to the trailer all day long. I look forward to not doing that relay any more. Then the one on the little trailer (my back up) will go into a food truck. Leaving the big trailer for concessions and competitions. I can't afford not to have a back up smoker.

So, after my accounting lesson last Monday, I now know how my books were calculated. Even after stressing about working capital for the first three years, we some how had enough cash flow to use up the credit we had?? The government did throw me a bone. I was able to totally depreciate everything the company owns. Unfortunately the state doesn't give full credit, 25k cap. Still it appears that you can not save money for a down payment on a building or whatever with out giving a bunch of the savings to the government. Very disappointed in that. For some reason I can spend it all, even just piss it away on let's say a new van even though my old one works just fine and not pay taxes, but if I want to be fiscally responsible and plan ahead, I get penalized. It still seams to me my business would grow faster and healthier if I had all the money I saved to invest in growth. I guess I will be building a food truck or two and maybe some concession trailers over the next couple years. Good news is, they can only tax my bank balance once.
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Harry Nutczak
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Joined: 01 Mar 2007
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PostPosted: Sat Aug 25 12 12:59 am    Post subject: Reply with quote

Our current government penalizes success, celebrates mediocrity, and rewards failure.

Look at our Olympians, they get nailed $9K in taxes for their gold medal.

Remember Charlie, "You didn't build your business, someone else did that for you" Author not to be mentioned
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daddywoofdawg
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Joined: 22 Jul 2008
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PostPosted: Sat Aug 25 12 1:42 am    Post subject: Reply with quote

I bet there is a lawyer that could set you up a reit and the company could invest it it then the reit buys the building you want and sells it to you.You think the mickey D's and applebee's of the world pay the taxes you do?it's all about how you lable your income.
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Garry
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PostPosted: Sat Aug 25 12 3:20 am    Post subject: Reply with quote

Harry Nutczak wrote:
Our current government penalizes success, celebrates mediocrity, and rewards failure.

Look at our Olympians, they get nailed $9K in taxes for their gold medal.

Remember Charlie, "You didn't build your business, someone else did that for you" Author not to be mentioned


That's not true. Olympians DO NOT pay taxes on their gold medal. And your comment about the building your business statement is false. Political posts are discouraged, but are tolerated as long as they are in good taste, but political posts that are blatant lies are prohibited.

The medals aren’t subject to taxes. Mark Jones, the communications director for the U.S. Olympic Committee told Salon in an email, “There is no ‘value’ to medals and there is no tax associated with it.”

When expenses are deductible depends on whether your accountant is using accrued or cash basis. You can't deduct them twice.
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BigOrson
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Joined: 02 Dec 2006
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PostPosted: Sat Aug 25 12 4:18 am    Post subject: Reply with quote

Uh Garry, The medal isn't the only prize awarded. Gold medalists get the medal and $25K, Silver $10K and Bronze $5K. You are right that the medal isn't taxable, but the income is. What I don't know for sure is if the USOC allows them to keep the cash because of their amateur status (or if the pro athletes that compete are allowed to keep the money and the amateurs arent).

No comment on the political stuff.
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Garry
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PostPosted: Sat Aug 25 12 4:20 am    Post subject: Reply with quote

Prize money is considered income. When I win prize money at a BBQ contest I pay taxes on it. And at a higher rate than some Presidential candidates.
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jd of de



Joined: 28 May 2009
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PostPosted: Sun Aug 26 12 1:15 am    Post subject: Reply with quote

Harry Nutczak wrote:

Remember Charlie, "You didn't build your business, someone else did that for you" Author not to be mentioned


You are going to have to tell us. If you think that's what Warren & Obama said you need to balance out your FOX and AM radio diet.

It's your right to hate, it's even your right to be ignorant, but don't be shocked when you are called out a liar. Get the quote right next time or quit using it.
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Harry Nutczak
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Joined: 01 Mar 2007
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PostPosted: Sun Aug 26 12 2:02 am    Post subject: Reply with quote

Cite;

http://www.huffingtonpost.com/2012/08/01/olympians-owe-irs-taxes-medals-cash-bonuses_n_1729486.html

Cite:
http://www.youtube.com/watch?v=YKjPI6no5ng

Any more needed???

Nuff Said!!
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Geronimo
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Joined: 29 Jul 2007
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Location: Montgomery, Texas (and lovin' it)

PostPosted: Sun Aug 26 12 7:00 am    Post subject: Reply with quote

I got nailed (audited) by using a Bookkeeper that was totally incompetent....my bad. (come to find out, the bookkeepers work from the last 6 jobs (companies) she worked on had been audited).

I then did my diligent research and hired the biggest (and best) accounting firm in my area.

Since the hiring of the accounting firm and them straightening out my books, I could concentrate on what I did best....run my business.

But you can bet your boots that every quarter he (accountant) and I went over my financials line by line so I KNEW every penny was accounted for and why.
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MikeJack
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PostPosted: Sun Aug 26 12 7:44 am    Post subject: Reply with quote

Geronimo how did you find your accountant? I know it sound a little naive but I don't think I have ever even met an accountant much less chose one to mind my money. I had much rather learn from the experiences of others than go through what some of you guys have gone through.
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