Accounting & Bookkeeping & Small Business Forum

[cbfive]

A couple of partners and I are looking at starting an IT company to provide contracts to the Government. The core group of partners is very technical but provide little to no business experience. We are at the beginning stages (In the process of writing our business plan) for our company and we have some hopefully generic questions.

1.Do I really need an accountant?

2.If we do need an accountant what type of questions should we ask the accountant to weed out the ones that will not fit our needs?

3.What type of accountant should we look for?

4.Would you recommend partners putting up their own capital to start the business or getting a loan?

5.What are the financial and tax advantages of each of the corporate structures? For a business of our type, which structure would have the greatest financial / tax advantages?

6.What is the tax process for the business? Once we receive revenue, when do we pay taxes? How much? Do we pay taxes on benefits? How much do we have to pay for withholdings? Any other taxes that we need to work in?

7.If we want to defer bonuses, payments, etc, how can we do this?

8.We are considering incorporating as soon as possible. Are there any financial / tax disadvantages to doing this?

9.Is there any value to paying for things like rent for a room if we don't need to charge ourselves rent?

10.That are the financial and tax advantages of each for opening a company in NC over SC or vise verse?

Any help would be greatly appreciated. Thank you

[Monica]

Hello cbfive,

Wow, I usually charge to answer some of these questions. :D

Yes, you need a professional bookkeeper. CPA's are more expensive for monthly bookkeeping and taxes.

Decide what it is that you are wanting the bookkeeper to do for you, make a list, and you will have your questions.

You need a professional bookkeeper.

Partners can contribute their own capital, or get a loan after you finish the businesss plan.

I usually recommend the c-corp entity.

Withholding taxes are determined by the amount each partner has on his/her w-4, if they are carrying themselves and family members, and the amount that you will be paying yourselves.

You will need to register your business name, and fill out an application for sales tax. Also, for payroll, if you draw paychecks right away, you
will be sent quarterly reports, or annual reports to fill out for payroll when you apply for an EIN on www.irs.gov.

What are you deffering? IRA's? annuities?

There are tax advantages to incorporating.

When you incorporate, you will be able to pay yourself rent expense out of the corporation. Otherwise, square footage would be the way to go as an expense.

I have not heard of tax advantages with regard to SC or NC. Someone else will need to answer this one.

Good luck,

Monica

[Richard Noot]

Monica,s quote

Withholding taxes are determined by the amount each partner has on his/her w-4, if they are carrying themselves and family members, and the amount that you will be paying yourselves.


Partners do NOT fill out w4s. Their wages are in the form of guaranteed payments and are subject to self employment tax NOT federal or state withholding

[Monica]

I stand corrected. Thank you Richard.

Monica

[Angie262]

Have you ever considered doing your own bookkeeping and tax preparation?.... you are on the forum for a school that provides you with instructions to not only do your own bookkeeping / accounting / and tax preparation, but also to learn how to strongly market your business, and maybe in the future add these necessary services to the list of services that you already provide your clients!

If you're interested.... let us know... we'd be happy to help you out!!

Angie :)

[Dina Tsourdinis-1]

Since you are at the beginning stages, I would consult with an accounting firm. i would not hire an accountant at this point.

[Richard Noot]

cbfive wrote: A couple of partners and I are looking at starting an IT company to provide contracts to the Government. The core group of partners is very technical but provide little to no business experience. We are at the beginning stages (In the process of writing our business plan) for our company and we have some hopefully generic questions.

1.Do I really need an accountant?

2.If we do need an accountant what type of questions should we ask the accountant to weed out the ones that will not fit our needs?

3.What type of accountant should we look for?

4.Would you recommend partners putting up their own capital to start the business or getting a loan?

5.What are the financial and tax advantages of each of the corporate structures? For a business of our type, which structure would have the greatest financial / tax advantages?

6.What is the tax process for the business? Once we receive revenue, when do we pay taxes? How much? Do we pay taxes on benefits? How much do we have to pay for withholdings? Any other taxes that we need to work in?

7.If we want to defer bonuses, payments, etc, how can we do this?

8.We are considering incorporating as soon as possible. Are there any financial / tax disadvantages to doing this?

9.Is there any value to paying for things like rent for a room if we don't need to charge ourselves rent?

10.That are the financial and tax advantages of each for opening a company in NC over SC or vise verse?

Any help would be greatly appreciated. Thank you

My suggestion is that any business needs an accountant especially when they are first starting out. Whether or not you need a bookkeeper depends on your particular situation. As far as what type of accountant to look for again my suggestion is one that specializes in small businesses and does consulting as weel as tax preparation. Look for someone that is credentialed and also belongs to professional organizations that subscribe to a code of ethics.

[David]

Go to www.accountweb.net and you will be able to find by zip code, lists of accountants. Those that have the PB certification will be able to assist you in all of your accounting needs.