If there is one thing that makes my blood boil, it's doing paperwork, especially taxes. I hate it. I hate keeping records, data entry, well, all of it. I've tried the accountant route, but it's expensive and I end up creating a spreadsheet to give to them that's nearly as annoying as doing it myself.
I'm hoping folks can share what they do tax-wise. Do you have any accounting hacks to make this less aggravating? What's your system and incorporation setup?
I'm currently managing the accounting and taxes of my 4 startups and my personal taxes, which includes two schedule C businesses. Two of the startups are LLCs and two are S-corps, though before I've had two other C corps. I've used Peachtree, Quickbooks, Quickbooks Online, PayCycle, Turbotax Business, and good ol' Excel over the years.
I recommend Quickbooks (the desktop version) if you are doing it yourself and/or have multiple businesses. If you want your partner(s) and/or accountant(s) to have easy access, Quickbooks Online is good, though it has some limitations. I've always used TurboTax business without any problems (and TurboTax personal for that matter).
I always use the Desktop versions of TurboTax. I don't think there is an online business version, but if there is, don't use it. You want that CD so that if you need to amend 5 years from now, you can use it.
For Schedule C and supporting documentation for Quickbooks I use Excel. I don't put every transaction into Quickbooks because that is crazy. Every so often, depending on the business, I reconcile the spreadsheet with my bank accounts by exporting data from underlying billing systems or PayPal or whatever. Then I put the aggregate values into Quickbooks.
For Schedule C, I have a spreadsheet that I've tweaked over the years to make doing my taxes really easy. I can go into more detail if you want.
I have keep scanned and paper copies of everything. I know it is anal, but it makes me feel good and it is proved its weight in gold in several situations.
I also highly recommend PayCycle. It integrates right into QuickBooks and makes doing everything associated with employees super simple.
Btw, I have had my books professionally audited once, and there were no problems.
Go for a hosted solution like quickbooks online or something like that. Why? Well, you can easily give access to your accountant or an investor (VC) and avoid all the paperwork that way... and you appear transparent to them. Now, that has some pros and cons but I think the pros overweigh the cons. You can then hire an accountant that's not even in your city and can save a lot of money that way. You also don't have to spend $500 right away since you'll be paying month-to-month.
I used a bookkeeper ($50/month) and tax accountant for taxes. He is a retired multi-millionaire, that wanted to see a smart young guy succeed. All expenses were via credit/debit card. All revenues were promptly deposited into the bank account, and reflected on bank statements.
A bookkeeper or accountant is useful once you start making money, because they help keep you objective and should be a useful resource.
I use FreshBooks (http://www.freshbooks.com) for invoicing. I'm probably going to explore Quickbooks.com (their online solution) also for the accounting side of things.
I think it's more a hired-help solution, although having an on-line, web based accounting thing would probably not be a bad business for the right person.
Couple questions, if you don't mind. Are you incorporated? Is it a specific turbo tax variety? What's the process like, and do you do quarterly estimated tax and all that?
Intuit's Turbo Tax walks you through everything. If you have a personal business, it will step you through the filing. If you have capital gains, it will help you with that as well. I just finished my taxes with Turbo Tax and it only took me about 15 minutes. Yes, I could have done them by hand, but I absolutely hate doing taxes even though I only do them once a year. The government already gets enough of my money, they will not get too much of my time also.
