Is it a good place to file taxes for independent contractor. I'm filing it on Schedule C, residing in PA. They gonna charge me $200-250. I'm not really sure how to fill out the form either...



Is it a good place to file taxes for independent contractor. I'm filing it on Schedule C, residing in PA. They gonna charge me $200-250. I'm not really sure how to fill out the form either...





^^^ not meaning to 'bad-mouth' the tax preparation services of H&R Block or Jackson Hewitt, but these services specialize in the quick and easy preparation of tax returns for EMPLOYEES. As such, their agents typically have little experience preparing tax returns for 'small businesses'. Also as such, an independent contractor dancer is not likely to receive a whole lot in the way of useful guidance from these tax preparation services ... despite the fact that they will charge her 'big bucks'.
Where tax preparation for independent contractor ( i.e. Sole Proprietor small business ) dancers is concerned, there is basically a 'fork in the road' to choose. If you want to have your taxes 'professionally' prepared, rather than engaging one of the 'WalMart' tax preparers you are far better off going to a CPA in private practice who specializes in small businesses. Even though the CPA is going to also charge you 'big bucks', at least you will get valuable guidance , recommendations, future financial advice etc. in addition to the tax return preparation in exchange for your hard earned money.
If you are going to have to organize your financial records yourself in order to present them to a 'WalMart' tax preparer, you have actually already performed 90% of the total work required to file your own tax return using a decent tax preparation program like Turbo Tax Home and Business or TaxAct Home and Business. Tax prep programs that can handle Schedule C small business taxes typically sell for $60-100, and basically provide you with the same amount of support in the event of an IRS audit that a 'WalMart' tax preparer does ( i.e. virtually none beyond a certification that tax related CALCULATIONS were done correctly based on the financial info provided by the small business owner ).
At least if you went to a CPA, that same CPA will still be available in the future to prepare next year's tax return based on info already 'on file' - which also usually lower the CPA's price for preparing next year's tax return. In the final analysis, if you are audited, no 'WalMart' tax preparation service is going to help you a bit ... since all of the financial info they utilized to prepare your tax return originated with YOUR financial records, and since the agent who prepared your return will probably be 'long gone' once tax season is over. At least the CPA will still be available if it becomes necessary to explain the hows and whys of your tax return to an IRS auditor.
But if you're going to have to explain the hows and whys yourself in the event of an IRS audit as the result of using a 'WalMart' tax preparation service, IMHO you might just as well save $100+ by preparing and filing your own tax return using one of the decent tax prep programs. I have been using TurboTax since it first came out 10 years ago, with absolutely no complaints or IRS audit problems.
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Last edited by Melonie; 04-09-2011 at 08:16 AM.


I learned this the hard way this year (that H&R Block isn't the best place for independent contractors to go). They charged me a lot and I ended up paying a lot and being extremely frustrated with myself and the whole process. Lesson learned and next year, new plan!
Thanks for breaking it down, Melonie!





^^^ as to 'paying a lot', this is probably worth discussing further. First issue is that any independent contractor dancer who is asking basic questions about filing her tax return at this late date ( relative to the April 15th deadline ) has probably not been filing and sending in quarterly estimated tax payments. As a result, she will indeed get 'hammered' with the entire amount of taxes due on all of her 2010 earnings when her tax return is filed within the next week.
Because independent contractor dancers are subject to both the 'employer's' and 'employee's' share of Social Security and Medicare taxes ( a.k.a. Self-Employment tax ) it is guaranteed that the IRS is going to collect 15.3% of ALL of her 2010 earnings. In regard to federal income tax on top of the Social Security / medicare tax, depending on how often she worked and how much she earned this could translate into zero for an infrequent part time dancer to another 15-20% ( over and above the 15.3% ) for a serious professional dancer. And if she lives in a state / city that also levee income taxes, that could translate into an additional few percent.
So yeah if a typical dancer has been earning $1000 a week = $50k gross earnings in 2010, and if she is single without children, she should probably expect to be hit with a tax bill of $7,500 for Social Security and Medicare tax, plus perhaps another $5,000 in federal income tax, plus yet another $1,000 in state income tax ( if her state levees an income tax ). Additionally, April 15th is also the due date for the estimated tax payment covering dancing earnings from January through March of 2011 ... which would probably be in the ballpark of another $3000.



if i could do it myself, i would.
Your not the only one! The same thing happened to me umm not this year but the one before. I was so upset forever but like you said, lesson learned.
You'll be much happier next year if you go to someone else. I went to someone else this year and he was amazing! And cheaper than H&R block too.





Actually, I think you're underestimating yourself !!! With the 'interview' process used by the better tax prep programs, it's much easier than you think !if i could do it myself, i would.
However, for a 'new' exotic dancer / tax filer, I fully recommend going to a CPA at least for the first year ... if for nothing else than to get some valuable recommendations in regard to 'structuring' your personal finances to legally minimize next year's tax bill. Unfortunately, you're not very likely to get any of this sort of professional guidance from a 'WalMart' tax preparer.
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