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I've got a couple of small businesses I run. I started them in the last couple of months. I feel lost when it comes to my taxes. I know I should be paying something, but I'm not real sure where to start. Is it worth the money to hire a CPA to get it going the right way now, while I'm not bringing in a lot, or should I try to work it out myself and spend the time learning the tax laws?

I am located in the U.S., Ohio specifically. I have an entertainment biz and I do IT work. I am really all over the place in terms of what I focus on, but I feel like I can put all my effort behind one and do well with it. I just need to get my finances in order. I don't make a lot but I could support myself with out working full time if I had to.

  • I am running as a sole proprietor an entertainment business, where I produce some shows (Stand up comedy, mma etc) and have a photobooth and dj arm. I also do it work on a consulting basis. I'm in the us. I did meet with a cpa and she seemed nice but pointed me in the direction of staying a sole prop until i generate much more revenue. As far as software she stated a spreadsheet is fine, but id prefer to use something like xero or quickbooks. Any thoughts on that? – ahackney Aug 22 '14 at 11:39
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The only professional designations for people allowed to provide tax advice are Attorney, EA or CPA. Attorney and CPA must be licensed in the State they practice in, EA's are licensed by the Federal government.

Tax preparers are not allowed to provide any tax advice, unless they hold any of these designations. They are only allowed to prepare your tax forms for you. So no, tax preparer is not a solution. Yes, you need to talk to a tax adviser (EA/CPA licensed in your State, you probably don't need a tax attorney). You should do that before you start earning money - so that you can plan properly and understand what expenses you can incur and how they're handled with regards to your future income tax payments.

You might also want to consider a bookkeeping service (many EA/CPA offices offer the bookkeeping as well). But that you can also do yourself, not all that complicated if you don't have tons of transactions and accounts.

  • I have already started earning money, so that ship has sailed. I do appreciate the info though. – ahackney Sep 12 '14 at 16:06
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Certainly sounds worthwhile to get a CPA to help you with setting up the books properly and learning to maintain them, even if you do it yourself thereafter. What's your own time worth?

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