OT: Do you use a bookkeeper or accountant? Why or why not?
 

First of all, thank you to Leon for allowing me to make this off topic post. It is greatly appreciated.

Unfortunately I lost my job due to a downsizing several days ago. Those of you on the board who know me know that I am an accoutnant, so the fact that I was let go two days after tax season ended was a bit tough to take.

I am trying to gain some insight as to the thoughts within the industry regarding keeping of books for tax purposes. I have to assume that feelings and actions on the topic run the gamut. I hope to gauge whether or not there may be a niche market for someone who would specialize in keeping the books for individuals and small businesses within the collectibles industry.

So what I would like to do is to open this up for any sort of response. Some of the questions I have (though there are many more and I do not want to limit things) include:

Do you keep an inventory? If so in what format (database, Excel, etc)?

Do you report your sales with your taxes? With the advent of the ever-so-lovely Payapl 1099-K forms, I assume we all have to report them in some way, which leads to my next question...

Do you report sales on a Schedule C? Are you an LLC or S-Corp? Do you report as an investor only on a Schedule D?

Do you currently have someone who keeps on top of things on a monthly or quarterly basis so that things don't get out of hand come the following April?

What would be your concerns or misgivings about hiring such a person? Cost? Fear (unwarrented) of someone requiring you to report cash transactions?

Do you think there could be a market for someone who is already an expert in taxation, bookkeeping and accounting who would specialize in the collectibles industry?

Again, any thoughts on the topic at all would be so greatly appreciated. If you would rather not post your feelings on the subject to the board, I would certainly welcome pm's as well.

Tom C

I do a schedule C, tho its very small and most of my stuff is a cash business. I am an accountant by trade, so if anyone wants advice on how to handle things, you can message me. Also, constant "losses" on Schedule C, whether real or "padded" are a flag for the IRS.

BTW, if you just buy and sell as a hobby, you are supposed to list the sales on the other income line of your return, not subject to SS tax and can only deduct expenses up to the amt of sales, and on Schedule A, as a misc itemized deduction. , which is subject to AGI limits.

also, a "Random sale" of a large item, not in the business, could be considered a collectible capital gain, taxed at 28 pct

Accountant for just about everything because if there is one thing I am frickin' horrible at it is accounting.

Yes on the specialized in accounting. E-mail me.

Excellent thoughts Scott and dead on with regard to the different ways that can or should be used to report income.

I come from a background as an IRS audit specialist. This is really where I got my idea from. It is amazing how ill prepared most people are for an audit from the IRS. While some audits are very casual and easy to fend off, others are downright intense and intrusive. In both cases, however, the best defense against the IRS is a clean set of books.

There is always the chance that someone never does get audited. If so, that is wonderful. But why take the risk? To me, it is like saying it is ok to live an unhealthy lifestyle because there is a chance that you won't get sick. While true, it may not be the best idea.

Anyway, thank you for the input Scott. Hope you don't mind if I bounce a few questions off you every once in a while.

Tom C

I use an accountant
 

I believe he does a great job for me and my businesses.If anyone in Eastern PA wants a reccomendation for an accountant please feel free to PM me. I will give you his name and contact information.

I use Schedule C within TurboTax Home/Business. Frankly, I don't know if there would be much of a market for an accountant specializing in the collectibles industry since it would be so small. However, I think there would be market for a small software application or app, which would organize this information for you, for tax purposes. For example, if there would be some easy way to dump buy and sell information from ebay into a format which would allow you to easily fill out the Schedule C, I think there would be demand for that. If the program would have additional flexibility where you could also enter off-ebay transactions such as purchases and consignments to auction houses, and where you could split lots up into individual items, that would be great.

I use quickbooks as well as an excel spreadsheet. It's a nice combo that has me covered a couple ways.