Daycare.com Forum
Daycare and Taxes>S-Corp and Day care
Childminder 08:49 AM 04-11-2013
Taxes, I HATE taxes. I know children not tax accounting.
I have always hired a professional and he recommended to me years ago that I open a S-Corporation, which is what I did. Until I started reading on here about Day Care being a specialized field and until I started reading Tom Copeland's blogs and posts I did not have a clue what a mistake I had made.
For 2011 I found what I thought was a day care specialist in tax prep. That is all she does. She did not have a clue what so ever with what to do with doing my S-corp so she passed me to someone that only does corporation tax prep and this person was supposed to close my S-corp and then file our personal as a schedule-C. I filed for an extension to have enough time to get all of this done and dissolved the corporation myself as of August 2012. Done. Finished. Now I can start claiming ALL of my deductions and feel better about my taxes. Uhhhh....NO.
This year I found some one that has been doing taxes for day care over 20 years. The gal from last year that I thought would work and that had passed me off to the corporation acct. didn't return my call so I used Tom Copeland's Tax preparer search and finally found what I think is a real powerhouse. She took a look at my taxes and wouldn't accept the liability of doing them.
She said that the S-corp taxes weren't closed properly and that the final return must still be done. That is why I thought I hired the lady last year. =( She could not do this because the original guy had not given enough information to continue depreciating my home and other depreciables. I have not been paying self employment taxes and social security taxes. He also had shown a huge profit each year and as a day care he was not claiming enough of the deductions(this is what I thought and why I tried to change).
Today I have to go back into original guy(a tad bit uncomfortable here) to have him finalize the corp taxes and to get from him a list of my depreciables so that she can do my personal taxes and claim my deductions properly.
Wish me luck. I hope I don't have any other problems that I don't know about. Ignorance is not bliss. I wish I understood this better.
I have always hired a professional and he recommended to me years ago that I open a S-Corporation, which is what I did. Until I started reading on here about Day Care being a specialized field and until I started reading Tom Copeland's blogs and posts I did not have a clue what a mistake I had made.
For 2011 I found what I thought was a day care specialist in tax prep. That is all she does. She did not have a clue what so ever with what to do with doing my S-corp so she passed me to someone that only does corporation tax prep and this person was supposed to close my S-corp and then file our personal as a schedule-C. I filed for an extension to have enough time to get all of this done and dissolved the corporation myself as of August 2012. Done. Finished. Now I can start claiming ALL of my deductions and feel better about my taxes. Uhhhh....NO.
This year I found some one that has been doing taxes for day care over 20 years. The gal from last year that I thought would work and that had passed me off to the corporation acct. didn't return my call so I used Tom Copeland's Tax preparer search and finally found what I think is a real powerhouse. She took a look at my taxes and wouldn't accept the liability of doing them.
She said that the S-corp taxes weren't closed properly and that the final return must still be done. That is why I thought I hired the lady last year. =( She could not do this because the original guy had not given enough information to continue depreciating my home and other depreciables. I have not been paying self employment taxes and social security taxes. He also had shown a huge profit each year and as a day care he was not claiming enough of the deductions(this is what I thought and why I tried to change).
Today I have to go back into original guy(a tad bit uncomfortable here) to have him finalize the corp taxes and to get from him a list of my depreciables so that she can do my personal taxes and claim my deductions properly.
Wish me luck. I hope I don't have any other problems that I don't know about. Ignorance is not bliss. I wish I understood this better.
Michael 01:31 PM 04-11-2013
Earlier this year I was advised by my accountant to file as an S-Corp for a new business I'm starting. Normally I would file as an LLC but my accountant said the new tax laws would make an S-Corp less tax burdensome then an LLC.
My opinion: While my accountant may be correct for tax reasons, I do not see an S-Corp being the right course unless the business was going to be growing into a larger business and taking in larger amounts of money and employees.
I am sticking with the LLC for my smaller business. If the business becomes much larger, I will then switch to an S-Corp structure.
My opinion: While my accountant may be correct for tax reasons, I do not see an S-Corp being the right course unless the business was going to be growing into a larger business and taking in larger amounts of money and employees.
I am sticking with the LLC for my smaller business. If the business becomes much larger, I will then switch to an S-Corp structure.
TomCopeland 06:57 PM 04-11-2013
Originally Posted by Michael:
Earlier this year I was advised by my accountant to file as an S-Corp for a new business I'm starting. Normally I would file as an LLC but my accountant said the new tax laws would make an S-Corp less tax burdensome then an LLC.
My opinion: While my accountant may be correct for tax reasons, I do not see an S-Corp being the right course unless the business was going to be growing into a larger business and taking in larger amounts of money and employees.
I am sticking with the LLC for my smaller business. If the business becomes much larger, I will then switch to an S-Corp structure.
This makes a lot of sense.Earlier this year I was advised by my accountant to file as an S-Corp for a new business I'm starting. Normally I would file as an LLC but my accountant said the new tax laws would make an S-Corp less tax burdensome then an LLC.
My opinion: While my accountant may be correct for tax reasons, I do not see an S-Corp being the right course unless the business was going to be growing into a larger business and taking in larger amounts of money and employees.
I am sticking with the LLC for my smaller business. If the business becomes much larger, I will then switch to an S-Corp structure.
Childminder 12:22 PM 05-06-2013
For those of you that are new to daycare and it's specialized IRS tax issues, do not, I repeat DO NOT, go to someone that doesn't specialize in day care taxes.
If you read my original post (the first in this thread) you will see that it was recommended that I open a S Corp and then thru this and other forums and Tom Copelands blog I figured out that I should not have done so. I dissolved it on my own last August and just received a Late Filing Penalty of more than I made last year because I did not file my final return within 2.5 months of dissolution.
Grrrr...I did not know this was supposed to be done. IRS told me when I called, that it was in the 1120S instructions. Uhhh...I didn't read them! I go to a %!(#!~* accountant and HE or SHE is suppose to read THEM! THEN they are paid to TELL ME!
I do not know taxes or accounting I know BABIES!!!!! and CHILDREN!!!!!
Vent over for now. I'll probably get riled up and need to explode again.
If you read my original post (the first in this thread) you will see that it was recommended that I open a S Corp and then thru this and other forums and Tom Copelands blog I figured out that I should not have done so. I dissolved it on my own last August and just received a Late Filing Penalty of more than I made last year because I did not file my final return within 2.5 months of dissolution.
Grrrr...I did not know this was supposed to be done. IRS told me when I called, that it was in the 1120S instructions. Uhhh...I didn't read them! I go to a %!(#!~* accountant and HE or SHE is suppose to read THEM! THEN they are paid to TELL ME!
I do not know taxes or accounting I know BABIES!!!!! and CHILDREN!!!!!
Vent over for now. I'll probably get riled up and need to explode again.
Childminder 12:27 PM 05-06-2013
Originally Posted by :
Quote:
Originally Posted by Michael
Earlier this year I was advised by my accountant to file as an S-Corp for a new business I'm starting. Normally I would file as an LLC but my accountant said the new tax laws would make an S-Corp less tax burdensome then an LLC.
My opinion: While my accountant may be correct for tax reasons, I do not see an S-Corp being the right course unless the business was going to be growing into a larger business and taking in larger amounts of money and employees.
I am sticking with the LLC for my smaller business. If the business becomes much larger, I will then switch to an S-Corp structure.
This makes a lot of sense.
Obviously I don't have any sense when it comes to tax accounting and business.Quote:
Originally Posted by Michael
Earlier this year I was advised by my accountant to file as an S-Corp for a new business I'm starting. Normally I would file as an LLC but my accountant said the new tax laws would make an S-Corp less tax burdensome then an LLC.
My opinion: While my accountant may be correct for tax reasons, I do not see an S-Corp being the right course unless the business was going to be growing into a larger business and taking in larger amounts of money and employees.
I am sticking with the LLC for my smaller business. If the business becomes much larger, I will then switch to an S-Corp structure.
This makes a lot of sense.
Michael 12:49 PM 05-06-2013
Originally Posted by Childminder:
Obviously I don't have any sense when it comes to tax accounting and business.
Can you change your corporate structure to an LLC for the future?Obviously I don't have any sense when it comes to tax accounting and business.
AmyKidsCo 01:47 PM 05-06-2013
Originally Posted by Childminder:
I do not know taxes or accounting I know BABIES!!!!! and CHILDREN!!!!!
You are not alone! The two things I hate the most about this business is filling openings and everything to do with money. If I could hire someone to do those two things I'd be a happy camper!I do not know taxes or accounting I know BABIES!!!!! and CHILDREN!!!!!
Childminder 04:31 PM 05-06-2013
Originally Posted by Michael:
Can you change your corporate structure to an LLC for the future?
Idk. I have no clue what to do. I dissolved my corporation on the advice of professionals. Idk what I should do. I am pretty sickened just trying to figure how to pay this bill by the 27th or they will put a lien on my property. I hope that the gal that wouldn't touch the corp will give me the right advice.Can you change your corporate structure to an LLC for the future?
I can understand how people lose fortunes by hiring the wrong people.
Childminder 04:35 PM 05-06-2013
Originally Posted by AmyKidsCo:
You are not alone! The two things I hate the most about this business is filling openings and everything to do with money. If I could hire someone to do those two things I'd be a happy camper!
I hear you!You are not alone! The two things I hate the most about this business is filling openings and everything to do with money. If I could hire someone to do those two things I'd be a happy camper!