RitaB Posted April 9, 2009 Report Share Posted April 9, 2009 Told my beauty shop owner she should NOT be paying this much tax! OK, I guess HER BOSS should be paying it. I'm so glad he did this the second week of April so I can search for crap between phone calls to show her. It really did not register when I asked her, "Even though you're not supposed to pay yourself wages, who do you think will be paying the employer part of your tax, and your new unemployment tax if you do?" Blank look. But her hair and make-up looked good. Boy, I need my roots done... Quote Link to comment Share on other sites More sharing options...
schirallicpa Posted April 9, 2009 Report Share Posted April 9, 2009 I just had one of these too. Although not a beauty shop owner. (Tell me, how much cash income did she report anyway?) Their response: "But I'm an LLC...." Quote Link to comment Share on other sites More sharing options...
imjulier Posted April 9, 2009 Report Share Posted April 9, 2009 What he probably meant is that she should elect to treat herself as a s-corp and then put herself on payroll. Not a bad option for many but I always make sure they have at least $50K in income before considering this option. Unless they've already elected to be treated as an s-corp then I don't care how much their income is. But, March 15th deadline to file to be treated as an s-corp has already passed so you can decide if there is a good reason to be filing election late. But again, it doesn't matter if they don't have much income. my 2 cents. Julie Quote Link to comment Share on other sites More sharing options...
JohnH Posted April 9, 2009 Report Share Posted April 9, 2009 Did the financial advisor make any suggestion about how much tax she should be paying? After it, her tax liabilty is a finite number and if he thinks it's too high, then he should be able to provide another finite number for an amount that won't be "too much". Ask her to get him to write that number down and you'll look over it. Quote Link to comment Share on other sites More sharing options...
RitaB Posted April 9, 2009 Author Report Share Posted April 9, 2009 Did the financial advisor make any suggestion about how much tax she should be paying? After it, her tax liabilty is a finite number and if he thinks it's too high, then he should be able to provide another finite number for an amount that won't be "too much". Ask her to get him to write that number down and you'll look over it. Good suggestion. I'm takin notes here. Net business income $30,000. All cash got deposited. (Of course it did.) Deceased hubby's retirement, her own SS benefits taxable. She has been a sole proprietor for 100 years. OK, a little less, but too long to be going through this crap on April 9. One thing I have thought of though, I will help her avoid taxes by increasing her deduction for tax preparation. You know, I'll bet he also told her that SS benefits are not taxable. Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted April 9, 2009 Report Share Posted April 9, 2009 This is great! I can't tell you how much I am learning here. Who needs CPE when we have these resources? Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted April 9, 2009 Report Share Posted April 9, 2009 Rita, the tax fee increase is a great idea. Wonder what this 'financial advisor' really does for a living? I'd be willing to place a small bet that he will, for a 'small fee', set her up with an S corp, so that she can save all that money. Quote Link to comment Share on other sites More sharing options...
joelgilb Posted April 9, 2009 Report Share Posted April 9, 2009 Agree with Julie though. An S-Corp may help her save taxes and it would increase your fees. Although I doubt her financial advisor was smart enough to think of this. He was probably thinking he could increase her retirement plan options and invest more with him, making him so much more money than everyone else in the picture. Quote Link to comment Share on other sites More sharing options...
RitaB Posted April 9, 2009 Author Report Share Posted April 9, 2009 Agree with Julie though. An S-Corp may help her save taxes and it would increase your fees. Although I doubt her financial advisor was smart enough to think of this. He was probably thinking he could increase her retirement plan options and invest more with him, making him so much more money than everyone else in the picture. After paying herself reasonable wages, I doubt there would be a great deal of SE savings. Especially with what I would charge for the extra tax returns. Especially now. When she's getting tax advice from some, some, some - oh, you know where I'm going here. I bet the Financial Advisor tries to sell her an IRA, which she used to get every year back in the day. Not that great an investment for a lady 66 years old, with SS and retirement benefits. Hey, but that's just me. She won't even know that it's taxable when withdrawn. She's not the sharpest knife in the drawer. Quote Link to comment Share on other sites More sharing options...
mcb39 Posted April 9, 2009 Report Share Posted April 9, 2009 Good suggestion. I'm takin notes here. Net business income $30,000. All cash got deposited. (Of course it did.) Deceased hubby's retirement, her own SS benefits taxable. She has been a sole proprietor for 100 years. OK, a little less, but too long to be going through this crap on April 9. One thing I have thought of though, I will help her avoid taxes by increasing her deduction for tax preparation. You know, I'll bet he also told her that SS benefits are not taxable. Rita, I've been in the tax business (sole proprietor) for as long as she's been in the beauty business and nobody pays me a wage. What have I been missing? Is her financial advisor handing out cards for free consults.? I haven't done my taxes yet, so maybe I could use some "good" advice. Quote Link to comment Share on other sites More sharing options...
GERALD Posted April 9, 2009 Report Share Posted April 9, 2009 Where are BettySue and Jerome when we need expert advise for beauty shop operators? If you don't remember Betty Sue, you are relatively new to ATX! Quote Link to comment Share on other sites More sharing options...
RitaB Posted April 9, 2009 Author Report Share Posted April 9, 2009 Where are BettySue and Jerome when we need expert advise for beauty shop operators? If you don't remember Betty Sue, you are relatively new to ATX! LOL. This guy may be the same one who kept telling me the other beauty shop girl contributed to a Traditional IRA, when the statement clearly said ROTH IRA. I faxed it to him with a note: "Maybe this is why I thought it was a ROTH..." Quote Link to comment Share on other sites More sharing options...
RitaB Posted April 9, 2009 Author Report Share Posted April 9, 2009 I just had one of these too. Although not a beauty shop owner. (Tell me, how much cash income did she report anyway?) Their response: "But I'm an LLC...." They're the worst. Just did returns for one that lost money big time, but owed State of TN Franchise Tax on inventory and net worth. "But we didn't even make any money." Well, that's the cost of liability coverage when you get it from the state of TN. Congratulations, you're an LLC. Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted April 9, 2009 Report Share Posted April 9, 2009 That's a very good line to remember - the cost of liability coverage for being an LLC. Nothing is free, the mileage may vary depending on the vehicle. Quote Link to comment Share on other sites More sharing options...
RitaB Posted April 9, 2009 Author Report Share Posted April 9, 2009 Rita, I've been in the tax business (sole proprietor) for as long as she's been in the beauty business and nobody pays me a wage. What have I been missing? Is her financial advisor handing out cards for free consults.? I haven't done my taxes yet, so maybe I could use some "good" advice. You haven't done your taxes yet!?! I'll get one of his cards for you. Although he may prey on, ahem, provide consultation for, only the beauty industry. (I haven't even done my extension yet.) Quote Link to comment Share on other sites More sharing options...
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