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Thread: Books or websites please?

  1. #1
    Senior Member missmolly's Avatar
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    Default Books or websites please?

    Are there any good books or websites that explain taxes from the very beggining. I'm in college and never made enough money to have to file taxes before and now that I'm dancing I definately have to file. I read through the threads here but I need a lot more information than that. I don't want to have someone prepare them for me so if anyone knows where I can get some info I would appreciate it.
    "It's hard to say that I was wrong, It's hard to say I miss you, since you've been gone I'm not the same"
    *MisS MoLLy*

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    God/dess montythegeek's Avatar
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    Default Re: Books or websites please?

    One basic place to start is the forms and a little gem called Publication 17-Your income tax. It will tell you how to do it.
    Its free at
    http://www.irs.gov/pub/irs-pdf/p17.pdf
    but be aware it is 300 pages long and will explain a lot of things you do not need to deal with. The other thing you need to know is dealing with estimated taxes.

    There is also a free IRS site for students at http://www.irs.gov/individuals/students/index.html

    Without knowing what you need to know, it is kind of tough to describe a good book.

  3. #3
    Banned Melonie's Avatar
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    Default Re: Books or websites please?

    First place to start is to realize that as a dancer you are highly likely to fall into the tax classification of Independent Contractor - Sole Proprietor Business.

    The basic form you have to file is form 1040. The IRS has instructions available at . However, because you work as an independent contractor - sole proprietor business, you need to file additional forms since the 1040 form itself is geared towards employees who receive paychecks.

    Your dancing income gets reported on an additional form called Schedule C - the IRS has instructions for Schedule C at . It is basically a substitute allowing you to figure out the total income you had for the year, something that employers automatically figure out for employees receiving paychecks and report on a W2 form (which you won't receive).

    One good thing about being considered an Independent Contractor and not an employee is that you're allowed to write off expenses against your Schedule C income by including another form called 2106. The IRS has instructions for this at

    Besides the basic income tax on your earnings, you'll also have to pay a Self Employment tax, which requires an additional form as well. The IRS has an applicable basic instruction sheet at . This is basically a substitute for the Social Security tax withheld from employee paychecks.

    And besides filing a tax return and paying income taxes once a year, you'll also have to file estimated tax forms and pay estimated taxes every three months. The IRS has instructions at . This is basically a substitute for employees having ordinary income tax withheld from their paycheck every week and having that money automatically sent to the IRS by their employer.

    If you've never filed income taxes before, I highly recommend investing in a program called TurboTax. Not only does it automatically fill out all of these forms for you, but it also prompts you to think of all sorts of potential business expense write-offs and other tax deductions. Best of all, it keeps you from doing anything stupid or forgetting anything essential, which could potentially send up a red flag for an IRS audit. It's sold directly from the company's website at , or all of the discount retailers have it also. But make absolutely sure that you get the version called "Turbo Tax Premier Home and Business" - the regular cheap version for individuals does not handle independent contractor - sole proprietor businesses, and the deluxe business version has stuff for Corporations, LLC's etc which you don't need ! Also be sure to get the matching state income tax program at the same time, because every state with an income tax of its own requires that you fill out and file a rough State equivalent form to all of the IRS federal forms.

    PS you can write off the cost of TurboTax as a business expense!


  4. #4
    Senior Member missmolly's Avatar
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    Default Re: Books or websites please?

    Thank you so much. I'll be starting on ym taxes really soon.
    "It's hard to say that I was wrong, It's hard to say I miss you, since you've been gone I'm not the same"
    *MisS MoLLy*

  5. #5
    Banned Melonie's Avatar
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    Default Re: Books or websites please?

    here's a little more involved explanation I wrote up for the now defunct S-P website - it's still available at

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    Default Re: Books or websites please?

    Damn, Melonie -- you have no idea how many phone calls you just saved me!

    Quote Originally Posted by Melonie link=board=6;threadid=3542;start=msg41904#msg41904 date=1070789434
    First place to start is to realize that as a dancer you are highly likely to fall into the tax classification of Independent Contractor - Sole Proprietor Business.

    The basic form you have to file is form 1040. The IRS has instructions available at http://www.irs.ustreas.gov/pub/irs-pdf/i1040gi.pdf . However, because you work as an independent contractor - sole proprietor business, you need to file additional forms since the 1040 form itself is geared towards employees who receive paychecks.

    Your dancing income gets reported on an additional form called Schedule C - the IRS has instructions for Schedule C at http://www.irs.ustreas.gov/pub/irs-pdf/i1040sc.pdf . It is basically a substitute allowing you to figure out the total income you had for the year, something that employers automatically figure out for employees receiving paychecks and report on a W2 form (which you won't receive).

    One good thing about being considered an Independent Contractor and not an employee is that you're allowed to write off expenses against your Schedule C income by including another form called 2106. The IRS has instructions for this at http://www.irs.ustreas.gov/pub/irs-pdf/f2106.pdf

    Besides the basic income tax on your earnings, you'll also have to pay a Self Employment tax, which requires an additional form as well. The IRS has an applicable basic instruction sheet at http://www.irs.ustreas.gov/pub/irs-pdf/p533.pdf . This is basically a substitute for the Social Security tax withheld from employee paychecks.

    And besides filing a tax return and paying income taxes once a year, you'll also have to file estimated tax forms and pay estimated taxes every three months. The IRS has instructions at http://www.irs.gov/pub/irs-fill/f1040e03.pdf . This is basically a substitute for employees having ordinary income tax withheld from their paycheck every week and having that money automatically sent to the IRS by their employer.

    If you've never filed income taxes before, I highly recommend investing in a program called TurboTax. Not only does it automatically fill out all of these forms for you, but it also prompts you to think of all sorts of potential business expense write-offs and other tax deductions. Best of all, it keeps you from doing anything stupid or forgetting anything essential, which could potentially send up a red flag for an IRS audit. It's sold directly from the company's website at http://www.intuit.com , or all of the discount retailers have it also. But make absolutely sure that you get the version called "Turbo Tax Premier Home and Business" - the regular cheap version for individuals does not handle independent contractor - sole proprietor businesses, and the deluxe business version has stuff for Corporations, LLC's etc which you don't need ! Also be sure to get the matching state income tax program at the same time, because every state with an income tax of its own requires that you fill out and file a rough State equivalent form to all of the IRS federal forms.

    PS you can write off the cost of TurboTax as a business expense!




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    Veteran Member NVJosh's Avatar
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    Default Re:Books or websites please?

    And while Melonie gives excellent advice, I will still trumpet the cause of my fellow CPAs. Spend the few hundred bucks it will take to have a CPA prepare your return (which is a tax deduction). Find a CPA who works with a lot of self-employed people. He or she will almost certainly save you many times his or her fee in taxes. Plus, you get the peace of mind of having a return prepared by a professional.

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    Banned Melonie's Avatar
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    Default Re:Books or websites please?

    Quote Originally Posted by NVJosh link=board=6;threadid=3542;start=msg58998#msg58998 date=1072466197
    And while Melonie gives excellent advice, I will still trumpet the cause of my fellow CPAs. Spend the few hundred bucks it will take to have a CPA prepare your return (which is a tax deduction). Find a CPA who works with a lot of self-employed people. He or she will almost certainly save you many times his or her fee in taxes. Plus, you get the peace of mind of having a return prepared by a professional.
    NVJosh, I won't dispute this point at all. Even though I load up my own tax forms with TurboTax, I still retain an accountant to help point me towards any promising new wrinkles and point me away from potential tiger traps where income taxes are concerned. But the trick is to find an accountant who is truly experienced with self-employed people. Just going to a run of the mill CPA could very well cause more confusion than it clears up!

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    God/dess montythegeek's Avatar
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    Default Re:Books or websites please?

    And the point of all these efforts is not just to get the forms filled out but to learn what all this stuff means! 80% of the human effort expended in filling out the tax forms is organizing the information. Learn what the accountant or tax program tells you just as much as you would learn about a medical condition your md told you you had. Learn WHY! You don't just hand a shoe box full of receipts to an accountant and sign checks.

  10. #10
    Featured Member Lilith's Avatar
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    Default Re:Books or websites please?

    1) Retain an accountant.

    While the vast majority of Working Joe Schmoe's could file their own or allow H&R (the McDonald's of accounting) to handle it, small businesses and the self-employed (both of which you are) have occasionally detailed and usually confusing forms and miscellania. An even better reason for retaining an accountant is that improperly filed claims almost beg an audit. The best reason of all is that no book or form in existence will be able to as succinctly point out the newest loophole or deductible expense that will save you hundreds. For instance, did you know that in your first year of dancing, you sometimes don't even have to file at all (Disclaimer: check with an accountant before just yelling "Whooopie!" This may not apply to you)? It's a kickback the Feds sometimes throw to small businesses; in the first year of business earnings often aren't much and are usually poured right back into the business. Politicians, capitalist dogs that they are, want your business to succeed, so you may have a "free ride" for your first year.

    2) Save your receipts, and
    3) File your taxes, without fail, even if you cannot afford it

    The biggest mistakes are not, in all of Stripperdom, drinking to excess, failure to hustle or deciding to offer extras; they are failing to file taxes at all and failure to save a receipt. The latter can end your career on the low note of owing hundreds of thousands to the Feds in unpaid taxes and penalties. Save receipts for EVERYTHING; it's far better to have a receipt for Chinese take-out ordered at work that you cannot deduct than to NOT have a receipt for the evening gown that you can. And if you haven't the money to pay your taxes, a good CPA can set up a payment plan that will keep you out of serious trouble.

    4) Track your earnings.

    You are a businesswoman, whether you behave as such or not. All the CPAs in the world can't help you if you have no idea how much you earned, where it was spent and how much was business expenses and have no receipts. Keep a simple ledger, even a small calendar with a daily tally of your gross and net earnings will do nicely as a start.

    5) Know what your accountant is doing and why.

    As Monty pointed out already, you should know what your accountant is doing. First off, if he muffs your taxes it won't be him that is in trouble, it'll be you. Secondly, it makes your next filing more efficient because you know what is going on and are more able to prepare yourself, ie; you've learned to ditch the receipts for the Chinese take-out and have a more legible ledger for him to peruse.

    6) Accountants help those who help themselves.

    Don't expect miracles. No CPA can erase a hundred years of government geared towards taxing its citizens. You'll still have to pay, but how much and how often depend entirely upon to what efforts you go to help yourself. He'll merely make it simpler for you.
    He who fights with monsters might take care lest he thereby become a monster. And if you gaze for long into an abyss, the abyss gazes also into you. ~ Friedrich Nietzsche

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    Veteran Member NVJosh's Avatar
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    Default Re:Books or websites please?

    Great post, Lilith. I couldn't have said it better myself (and I'm a CPA who works mostly with small business owners). The two points I liked most were "keep your records organized" and "there's only so much the CPA can do." While I often say "Taxes is magic" (sic), there are limits to what we can do. This is why I no longer tell clients I want to minimize their taxes. I want to optimize them, so that the current tax burden is appropriate for helping them reach their long term goals.

    When you pick a CPA, do you shopping well. Don't be afraid to ask questions, and if the fit doesn't seem right, move on. Big cities of lots of CPAs, catering to lots of different types of clients. You'll find the one right for you eventually.

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