LLCs Don't Know What Sales Tax They Owe
Small business owners across various industries are struggling with the overwhelming complexity and cost of taxes, compliance, and business setup. Many feel unprepared, unsure of their obligations, and are seeking professional help to navigate the intricacies of filing, deductions, and potential tax liabilities. This often involves unexpected expenses and a lack of clarity on basic business requirements.
SOURCES (60)
“I'm currently a part time executive director of a very small nonprofit in NJ. I'm hoping to be able to move to California and do most of my job remotely from there, without my employer having to set up all the withholding there etc. Is…”
“The rule of thumb is 25% plus your state tax rate (4.25%) of the gross amount. You can, and should, move to net amounts, but it gets complicated without proper books and records. You should set this amount aside, at least monthly. I would also put it in a new and separate high-yield savings account. I prefer Ally.”
“I hope this is the right community to post this but as the title states my wife is now self employed and started a job where she gets payed by Venmo. Neither of us have done any self employed work and are unsure what things will look like come tax time. I’m going to leave the details vague for privacy but I’m hoping to get an estimate of what would need to be set aside to pay taxes. So she works 40 hours at $19/hour. To make it an easy number let’s say that comes to $40,000 per year. This would”
“NJ has a gross income tax. Not necessarily hard, but very different. Losses are not allowed, medical deductions are, and there is a credit for taxes paid to other jurisdictions, so you have to figure out those states first, and most of the time, that state is NY.”
“Maybe he was just getting tax ready books and that’s it. No AR/AP or financial statements, reconciled every 6 months”
“I met someone while doing the networking thing and he works for Controllers Ltd. Sounds like they do some gray area planning but they aren’t CPAs. Anyone heard of them or worked with them? Should I stay far away? submitted by /u/Jolly-Outside-4512 [link] [comments]”
“Most individuals use their CPA more as a consultant than a preparer now. Compliance is incredibly important, but clients usually don’t come just for that”
“Your firm is not a small firm from what you're describing so you shouldn't use it as reference for how much you can charge for your one-man tax shop. I worked as an intern at a 2 man shop (this is small) and he charged $350 to do a simple 1040 tax return with no schedule C for a recent grad/first time employed client.”
“50 people work here. Clients in 40 states or so. 4-5 offices. I'm saying people pay our rates in all COL areas. It's not like we're only targeting HCOL cities. But it doesn't matter where I work now. The question is what am I missing when thinking about opening a boutique one-man show?”
“I am so confused you are a small firm but a national firm? Like what are you talking about. You aren’t a national firm for doing returns across the country. How many people work at your firm?”
Thanks. I'm new to talking accounting on Reddit. I'll check it out.
“How was you experience in finding a small business tax strategist? I interviewed 4 CPA's (in their 'free 15 minute consultations') who advertised also providing business advisory services: One wanted $5k for the advisory services and $3k to file the taxes, and in their contract I saw they would be assigning me with their most junior person. (They also do wealth management, which I later heard is a red-flag if looking for a CPA). One sounded like he was coked-up, and was name dropping”
“Hi everyone, I'm struggling with a specific tax classification issue and have been researching it extensively. On the off chance this reaches someone with real expertise — a former CRA agent, tax lawyer, or similar — I'm posting my situation here. This isn't a question born of insufficient due diligence. I've already consulted multiple CPAs and tax experts and keep getting mixed answers. Essentially, I'm trying to determine whether I can continue treating my options activity”
“Looking at what our firm charges for a straightforward return and a basic annual tax projection meeting, I can't help but wonder if I'd be better off starting a solo practice with the goal of managing ~100 returns each year, with half those clients paying for ongoing tax planning and calling it a day. Anyone gone this route? Other than finding the clients, what am I missing here? Seems like a relatively easy path to earn six figures working <40 hours per week (average out across the y”
“Sharing that I used a company about a year ago to help research tax debt solutions and strategies. It was a terrible experience after all the conversations with them, connecting to the IRS for PoA, and then enduring about a $5,000 payment plan that resulted in delayed communication as the agent I was working directly with was not very responsive given the plan he set up. After all was said and done, he told me that the solution he came up with was one that I could have done myself if I contacted”
This. Especially if you'll be responsible for processing 1099s.
“A Hawaii firm license isn't necessarily required if the firm only does taxes (and not public accounting like auditing). Separately, CPAs prepare taxes for every jurisdiction in the country, licensure is usually in your home residence/work state If they're saying or advertising that they are a CPA then they should be able to tell you which state if you want to confirm, but non-CPAs can also prepare taxes”
“I think you should give it a try. Try working at a small PA firm to get experience and give it a go for a few seasons.”
“Tax benefits can be significant in the commercial world compared to residential, make sure you involve your CPA in the decision making.”
“We’re looking at TaxProLink. Looking for input from colleagues who have used it. Thanks. submitted by /u/Distinct_Echo_9768 [link] [comments]”
“Standard fees. Higher than mine, but not crazy. You can't really know if they're doing a good job without a professional review.”
“I’m struggling with my 2025 tax return. I started with OnlyFans in November, and before that I already had a small business for my work as a photo model. So far, I’ve just entered my individual shoots separately in my income and expense statement. Do I need to record OnlyFans monthly, or is the annual turnover enough? ChatGPT says that only the date of the actual payout matters as income. Is that true? Also, I have to list everything in euros, but I no longer know the exchange rate from back the”
“I'm a CPA, but not YOUR CPA. You should consult your own tax advisor. I haven't done deep research on this kind of transaction specifically, but in general transactions between related parties need to be at Fair Market Value. Depending on the value and condition of your van, the rental rate may be more or less than the standard mileage rate. What she pays you will need to be picked up as income. However, you generally cannot use the standard mileage rate to deduct your costs related to t”
“Ok, thank you. I’ll go back to our separate taxes that year and add all the respective figures to get total tax instead of relying on the tax transcript. I have the profit and loss statements for the small businesses my husband owned. But i know calculating quarterly AGI involves more than just adding all the “net income” amounts together along with 25% of the annual W2 earnings.”
“Saving receipts is fine in and of itself. But all this good advice in here about taxes and maybe switching to an S-Corp isnt truly actionable in an sort of accurate way without truly understanding your paper/taxable profits and cash profits (e.g. cashflow)...which are not the same. Let's use the quarterly tax payments as an example. How are you planning on calculating what to pay? If you do it based on your revenue or gross-profit you are way overpaying. Did you factor in S179 or Bonus depre”
“You have to report it, you're running a rental business, whether you have to pay tax depends on what you're reporting as the income from that rental and what your expenses are as well as your larger tax situation.”
“You don't make enough to pay any "Portland Tax" other than the Arts Tax, which has recently been raised to $50.”
“This 100%. Fractional cfo/controller is the way to go. If you have a good one, you won’t even need to talk to tax people :)”
“Those fees might be high except for the tentacles. People tend to just look at the entities and the returns and miss the most complicated part, which is coordinating your S corp's return with your 1040, and everything with your family partnership. There are tentacles going in all directions that must be completely understood and strategized or any benefit from those entities will vanish. That said I believe communication is of vital importance for a good tax pro. If you don't understand”
“*EDIT: when I meant reimburse, I didn’t mean that someone would actually pay me back the full cost of the deep interior cleaning. Just that I could use it against my taxable income as a business expense Uber/Lyft is considered self employed and we can costs like milage and certain business expenses to reduce our taxable income. I usually do regular cleanings of a dollar or so to vacuum and pick up trash. But after three years and almost 5000 rides and maybe 15,000 people in and out of my car, it”
“I am trying to structure a commission type salon in a way that service providers will be 1099 instead of W2. Below is a list of the breakdown of what the business provides and what the service professional provides. Can we legally run this with 1099 type employment? Business: Provide FFE (chairs, cabinets, mirrors, shampoo bowls, treatment tables, etc.) Utilities Internet Security Common area Laundry Printer Payment/booking software Provides maintenance and repairs Janitorial services for common”
“What's up, fellas? I'm an accountant out of Silicon Valley and Salinas Valley. Been in the industry doing tax and accounting work for about 7 years now, and I'm 28 years old currently. I found an amazing Niche in agriculture here, specifically with strawberry farmers. I do their payroll, tax work, and prep their work for lending (they get operating loans every year through different entities like Cal Coastal and CA Farm Link). I also deal with their HR and Compliance Matters. I basic”
“How do I, not a tax professional, know whether my accountants are doing a good job? By which I mean, taking advantage of all deductions, credits, incentives, etc to legally reduce my income tax burden as much as possible? After my previous (highly regarded) accountant retired, he provided a list of accountant firms I could transition to but advised that he did not necessarily personally know or endorse them. I have been with this new firm for 5 years now and every year I seem to catch some mista”
“Yes. Try: “Do you handle multistate individual returns, trust income, and S-corp planning for self-employed clients?””
“I’m new to handling Texas Sales and Use Tax, and I honestly don’t know where to start. I haven’t received any training, so I’m trying to figure everything out on my own. We’re trying to close out a business in Texas, but I’m not sure what the proper process is. We also don’t have the Webfile number, so I’m wondering if there’s a way to retrieve it or if there’s another way to file or close the account without it. Has anyone gone through this process before? What steps did you take to close out t”
“I have a lot of questions about the legal/tax side of things. We are just starting off now so I am trying not to dump too much money into software or anything but what is required at this point? Do we have to register the business as anything? Are we considered self-employed or are we employed by our own business? How often do we pay taxes? And the business has to pay taxes plus we have to pay our own taxes on top of that correct? submitted by /u/IAmKMazYT [link] [comments]”
“Disagree with some folks saying you need a bigger firm. I think you’d be paying for a lot of technical expertise you wouldn’t use. My advice is to identify the wealthy suburbs in your area and find a firm that leans into the “boutique” vibe. If you have a lawyer ask them who they like to work with, in those words. Same with a financial advisor if you have one. Good firms operate on a referral network in smaller, wealthy areas. What you’re describing isn’t particularly complicated, but you’re rig”
“This is also my answer. They really don't need mid-size firm services. They need closer interaction, which, while more expensive, is generally better with simple businesses with complex tax and accounting needs. Plus someone can know their business no manager A, and six months later manager C”
“Thank you for this!! So “multi state individual or business tax partner” is exactly the jargon we should use when reaching out?”
“That makes sense and we aren’t against this at all. We want our taxes done correctly, and we also want advice as I believe we aren’t optimizing things well.”
“Yeah none of those items are particularly complicated. A competent EA or CPA should be able to do all of that. But be prepared for sticker shock as a firm who can't handle those things is probably built on low cost, high volume.”
“Have you checked with your home state society of CPAs? You can also ask colleagues in your industry for introductions”
“Hi all! Really hoping someone can point us in the right direction aka not just say “Google it” because we’ve tried and haven’t found a good lead after months of research and only getting bad leads (that have awful reviews from former clients). We have a situation that I don’t imagine is actually that complicated in the tax world for the right firm, but is complex for the firm we’ve used for years. We are a married couple with residences in multiple states, both self-employed, and one spouse bene”
“I’m a small business bringing in over $300,000 a year in revenue. I’m exploring S corp election and better accounting related services. Has anyone used Collective or Lettuce? $300 a month for taxes, book keeping and s corp doesn’t sound bad at all. I’m in the construction space if that matters submitted by /u/atlhooo [link] [comments]”
“A net loss of $500 is a “tax savings” of $185. It is not worth the hassle, filing cost, or risk to save $185. The only way to save tax in your position is to sell your losers for a loss.”
“Ask for people in your network to give warm intros to their CPAs. Most everyone uses a CPA for their taxes, even if they’re just personal taxes.”
“Maybe you should hire an accountant. One who knows how to do a Google search and knows how to go to tax authority web sites. Just a thought.”
“you owe self-employment tax if your net income is $400. make sure to deduct your business expenses (ordinary and necessary expenses related to the job - like mileage/car expenses, business use percentage of phone bill, supplies, etc.) - it reduces your taxable income.”
“Ours is in an LLC. If you take it fully active, as earned income, self employed, you get hit with a 15.3% SS and medicare premium tax. If you take it passive, you don't pay this. If you go the s corp route and take it as salary you will get hit with the tax. The corporate part of the payment, half, is tax deductible. But it still has to be paid. The personal income is now 7.65%. Plus, we have a real estate business. So we get optimal mixing of passive and active of excess expenses or depreci”
“Location: Vermont Scenario 1: I have a home office I intend to use exclusively for my small business (LLC). Office is approx 200sqf and I will do administrative business tasks (tax, website, customer outreach, etc.) exclusively in this office and shipping/hold inventory. I will use ~150sqf of this office for this work. This will be the business address and primary location. I also have an art studio in a commercial building. Rent is paid by the LLC. Studio is approx 80sfq and I will use all of t”
“You’re going to owe taxes regardless of how the income is generated, whether that’s via entrepreneurial means, 1099 doordashing, or a W2 job. The difference is whether you pay them yourself, or if it’s withheld from your w2 paycheck. The best thing you can do is to put aside at least 20% of any non-w2 income (profit) you generate in a high yield savings account and don’t touch it until the tax bill hits. Get that set up, then focus on making the money”
“Hello r/tax . Got no fucking training. Live in California and trying to file sales tax for a company. We get the company's 3 months of bank statements, and we have to compare it to the Point of Service summaries with gross and net sales, taxes paid, etc. Fucking uber eats, doordash, all these companies have different rules regarding sales tax, then tips. This if for a restaurant. Boss is on my ass for not knowing something I never did before. How to learn this? submitted by /u/ot”