Tuesday, February 08, 2005

Tax stuff

Tonight I finished putting together the materials needed to file our 2004 income taxes. Since I do some side work I need to put my expenses and revenues into intelligible form, which I do in the form of an OpenOffice.org spreadsheet. I then print this out and give it along with all my receipts to our accountant.

What I really need to do is start using something like Quicken or QuickBooks to keep track of all this stuff. Quicken is meant for personal finances but a lot of small business use it. Still, I'd rather use something that adheres to GAAP, which means I should shell out for Quickbooks. It's a shame that I need to do that, since my iBook came with Quicken already loaded.

Anyway, Judith will be dropping off all of our stuff with our accountant next Saturday, so we should find out what sort of refund we'll be getting soon.


Al Sande said...

You might want to reconsider Quicken, particularly if you already have it. Adherence to GAAP isn't really a function of the software (although sometimes it can help); it's more a function of how you enter the information into it.

I can't comment on US tax laws since I'm from the great white north, but I assume all you're really doing is categorizing your revenues and expenses, and that some of your revenue and expenses need to be reported separately for tax purposes.

Quicken should allow you to do that and then print out a custom report showing only the selected tidbits of your personal finances that relate to the business. I've been using Quicken for years for my personal stuff, and although I currently don't have any "on the side" income, it worked well enough to track my BBS activities so that I could report it on my tax return (I ran a BBS for 8 years, until 1996 when the Internet proved to be too much of a good thing).

Unless you use a totally separate bank account for your business activities, you'll find the business transactions are likely "intermingled" with your personal transactions, so it's often easier to use something like Quicken trather than Quickbooks for tracking, unless you need the pure business functions of the program (receivables/payables/etc).

For what that's worth...

Jon Hassell said...

You don't need Quickbooks for what you do. Just create a few new categories for your income, assign them to a tax line item (a quick call to your accountant will tell you this information) and then when tax time next comes, print out a tax report. GAAP is nice but that's for your accountant to worry about. :)