Author Topic: New LLC, Wave financial app, what to generate for cpa?  (Read 1385 times)

Ben Hogan

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New LLC, Wave financial app, what to generate for cpa?
« on: March 26, 2018, 06:00:30 AM »
Howdy MMM folks.

I started a LLC this past year, and I use the Wave software to organize my spending. My CPA told me to generate a tax report for him for 2017, I cant find anything like that in Wave. Does anyone have any suggestions on how to go about generating this?

It's a LLC with a single member and filing tax as an S corp.

Thanks.

SeattleCPA

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Re: New LLC, Wave financial app, what to generate for cpa?
« Reply #1 on: March 26, 2018, 06:58:28 PM »
You'll need to supply a profit and loss statement.

If your revenues or assets exceed $250K, you'll also need to provide a balance sheet as of the start and end of the year.

You'll also want to provide copies of your W-2.

Ben Hogan

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Re: New LLC, Wave financial app, what to generate for cpa?
« Reply #2 on: March 26, 2018, 08:23:02 PM »
Thanks SeattleCPA, one of the area that I'm not understanding is that I put in about 10g of my own money, what catagory does that go down as, because I made a profit if that counted as income :)

SeattleCPA

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Re: New LLC, Wave financial app, what to generate for cpa?
« Reply #3 on: March 28, 2018, 07:50:46 AM »
Owner capital contributions (like your $10K) don't count as income.

Similarly, owner draws don't count as expense.

A tip: You really want to have a real accounting system for a small business. Particularly for an S corporation since you either will be required to submit financial statements (a profit and loss statement, balance sheets, etc) as part of the 1120S tax return.

Also, if you use a real accounting system, you will typically pick up additional deductions.

Ben Hogan

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Re: New LLC, Wave financial app, what to generate for cpa?
« Reply #4 on: March 28, 2018, 09:04:40 AM »
Can you recommend a accounting system?

Thanks for all your help BTW.

SeattleCPA

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Re: New LLC, Wave financial app, what to generate for cpa?
« Reply #5 on: March 28, 2018, 12:46:12 PM »
Quicken is fine. So is QuickBooks, Xero, etc.

BTW, the online accounting option gets expensive over time (the monthly charge adds up) but if you need help with the accounting (because it's complicated) that route makes sense.

wageslave23

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Re: New LLC, Wave financial app, what to generate for cpa?
« Reply #6 on: March 28, 2018, 03:14:03 PM »
Quicken is fine. So is QuickBooks, Xero, etc.

BTW, the online accounting option gets expensive over time (the monthly charge adds up) but if you need help with the accounting (because it's complicated) that route makes sense.

I would agree.  But quickbooks online seems to be where the industry is going.  I think Intuit will start phasing out desktop versions over the next few years. Plus with the online version, you don't have to print out anything for your accountant.  Just add him as an accountant user and he can access whatever he needs directly. 

wageslave23

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Re: New LLC, Wave financial app, what to generate for cpa?
« Reply #7 on: March 28, 2018, 03:17:07 PM »
Owner capital contributions (like your $10K) don't count as income.

Similarly, owner draws don't count as expense.

A tip: You really want to have a real accounting system for a small business. Particularly for an S corporation since you either will be required to submit financial statements (a profit and loss statement, balance sheets, etc) as part of the 1120S tax return.

Also, if you use a real accounting system, you will typically pick up additional deductions.

I would recommend giving him a list of the total money you contributed and withdrew during the year so he can double check that you entered those transactions correctly. Also make sure you give your CPA a list of any expenses that you paid out of your own pocket that you didn't record in wave. 

Ben Hogan

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Re: New LLC, Wave financial app, what to generate for cpa?
« Reply #8 on: March 29, 2018, 09:27:12 AM »
Thanks guys, I got a CPA to look at the financials, he suggested that I do my own personal tax as it seems to simple for him  to charge $300 to do that portion. Now I gotta figure out how to write off the $ I put in to the business?

catccc

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Re: New LLC, Wave financial app, what to generate for cpa?
« Reply #9 on: March 29, 2018, 11:49:00 AM »
You don't get to write off the $ amount invested in the biz, that's just your owner contribution.  If you've spent the money on business expenses, you can write that off.  Example:

I put $10K into my biz.  I use some of that money to buy a $2K laptop.  I spend $1K on website design and a website to promote my biz.  I get one client, and he pays me $2K for services.  I drive 100 miles to meet with client. 

Here's what my schedule C looks like:
Income: $2,000
Expenses: $1,000 advertising
                $54 mileage
                $667 depreciation (assuming 1 full year of straight line depreciation)
Net Profit: $279  (this amount goes to line 12 on your 1040)

You'll have to fill out form 4562 for the mileage and depreciation.  You can also elect section 179 and take the cost of the laptop rather than depreciating, but then you are subject to business income limits, so you'll have to carryover some of the expense to 2018, but then you'll have no net profit and therefore no taxes to pay.  I'd actually opt to section 179 the laptop, but that's up to you.

I suspect I'm getting into some accounting terms you may be unfamiliar with, but just pull out the IRS instructions and go line by line to get started.

wageslave23

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Re: New LLC, Wave financial app, what to generate for cpa?
« Reply #10 on: March 29, 2018, 12:37:45 PM »
Thanks guys, I got a CPA to look at the financials, he suggested that I do my own personal tax as it seems to simple for him  to charge $300 to do that portion. Now I gotta figure out how to write off the $ I put in to the business?

Honestly, I would pay the $300.  Based on your questions you don't have a solid enough understanding of taxes to do your own - no offense just trying to help.  With the time you spend and the high likelihood that you will miss an expense or report incorrectly its probably not worth it.  People that just have a w2 and some normal investment income can do their own taxes but once you start a business it gets more complicated.

 

Wow, a phone plan for fifteen bucks!