Friday, January 16, 2009


In yesterday’s post “What To Do” I talked about how to go about choosing a tax professional.

One criteria I mentioned was that you should look for a tax pro who is experienced in preparing returns for taxpayers who are in the same trade or profession. Police officers, fire fighters, doctors, nurses, teachers, outside salesmen, actors, etc should look for preparers who are familiar with the specific tax deductions and benefits that are unique to police officers, fire fighters, doctors, etc.

Similarly, if you have your own business you should seek a pro experienced in the intricacies of your type of business. Are you a service business? Do you have a retail operation? Do you manufacture a product?

I also suggested that perhaps you should look at the various tax bloggers as possible “candidates”. From their posts you should be able to get an idea of their knowledge, expertise, ethics, individual “specialities”, and availability.

In today’s world you do not need to find a tax pro located in your neighborhood. While most of the clients I have today started out that way, with either me or my mentor, as they move around the state and around the nation they continue to mail their tax “stuff” to me each season because of the relationship that has built up over the years. I have 1040 clients all over the US.

I remember during my early years as an apprentice we would get a package each year from the Netherlands. One of my mentor’s clients had retired there but still sent us the “stuff” for her US tax return.

With the economy in recession and layoffs increasing, millions of Americans are turning to the Internet to earn extra income, some even replacing their full-time jobs with businesses created solely online. The web has seen a huge increase in bloggers, eBay sellers, affiliate marketers, service providers and other online businesses in the last year.

Such an online business is unique. Individuals with such a business need to find a tax professional familiar with PayPal, shopping carts, eBay reports and other items that are unique to these online businesses. This type of business is relatively new, and most local tax preparers, however competent and experienced with general business taxation, are not very familiar with its ins and outs.

The result is that many online business owners are not getting the advice they seek, and many are overpaying their taxes simply because they, and many preparers, don’t know what expenses they can deduct and other strategies they can use to minimize their taxes.

If I may be allowed to make a recommendation: My fellow taxblogger Kristine McKinley of Lees Summit MO - a CPA, a Certified Financial Planner, the founding principal of Beacon Financial Advisors, LLC and author of the blog EBIZ TAX TIPS, offers tax advice for U.S. taxpayers who have income earned from online businesses such as eBay, blogging, affiliate marketing, etc.

Kristine has been providing tax preparation and advice to individuals and small business owners for 15 years. She can provide online business owners with help in understanding the tax rules regarding online income, and provide answers to questions such as:

* How do I report my online or 1099 income?
* What expenses can I deduct?
* What is the best business structure for my company?
* Do I need to make estimated tax payments?
* How can I minimize the taxes I pay on my online income?

You can contact Kristine at Tell her The Wandering Tax Pro sent you!


No comments: