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Is my accountant playing things too safe? In 2011 my company brought in a total of $82k and on my personal taxes I paid $1100.00 to Federal and $424.00 to state. The following year we made $73k and on my personal taxes I got 142.00 back from the feds, and paid the state 21.00. This year the company made $74k and now I'm looking at paying out $3000.00 in April. Doesn't seem right to me. Seems to be a bit much.
You are not proving enough information for anyone to properly evaluate your tax situation.
It looks like you are presenting your GROSS income and have provided NOTHING in respect to what your expenses were. Further, there is no mention of other income sources such as interest, dividends, rental income, etc.
We need a complete income picture to give you good advice.
73k was our gross income. 9600.00 was put out for materials. 15000 miles traveled for work. 1782.00 for meals. 600.00 for truck maint. 5100.00 in property tax and 12,000.00 in mortgage interest. Plus 1094.00 in healthcare, 650.00 in contractors ins. 400.00 in workmans comp. 900.00 in homeowners ins. And 410.00 for contractors lic.Quote:
Originally Posted by AtlantaTaxExpert
No other income other then the 73k
Assuming you are married with NO children (based on the fact that you are saying it is OUR gross income, my initial calculations show you owing $9,964.
Unless you have other considerations I am not aware, if you have to pay ONLY $3,000, it seems to me that your accountant is definitely earning his fee.
Only other this you are not calculating is our business occupies 33% of our home. If I'm correct the 33% of our electric which total for the year is 2500.00 ,our internet(primarily used for business) 600.00, heating oil 725.00 and co. cell phone which is 1560.00 per year. My main concern is when we grossed 82k we paid our payroll taxes in Jan in the amount of 3800.00(state and fed.) then only paid 1100.00 in federal and 450.00 in state taxes in April. Since we made 15k more last year then the prior year he is raising our salaries almost 18%. He say if he does not do that it will raise a red flag since as officers of a corp. we have to make a reasonable salary. I own 51% and my wife owns 49%.Quote:
Originally Posted by AtlantaTaxExpert
Okay, then your return is either a partnership or corporate return. Your accountant's concerns about not have adequate salaries are VALID in my opinion.
You are paying him for his expertise, so follow his advice.
There are two issues here. Your business return (Unless you file a Schedule C as sole proprietor) and your personal return. Since you are being paid a salary, these should be 2 separate returns. The portion of your real estate taxes and utilities that are attributable to the business would be deduction against your business income along with salaries and other expenses. The costs for materials, travels, etc. are also business deductions and not used to offset salary.
You have a fairly complex situation there and if you don't trust your accountant, then spend a little money and have another CPA go over your return and/or books. If you find your accountant is not doing right by you replace him.
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