Tax Anxiety

Caroline, from Manhattan, sent a request for my expense list , noting her profession as “artist/home studio/day job (also 1099) (yikes).” She said she’d been doing it for 4 or 5 years.

When I sent the expense list to Caroline I included a note: "Yikes! Yours is not a unique situation."

I thought the correspondence that followed would be of interest to many of you. Here it is.


Thanks June.

It was a step up for me to hire an accountant several years ago. She has a good heart but severe anxiety issues.

She keeps leaving messages on my cell phone marked “urgent" saying that for 2007 I’m going to owe 15K etc. I haven't filed this year yet but last year I paid about $900.

If I’m making almost the same amount of money, why would it jump to such crazy numbers? Is it just that I’m naive?

I have two questions:
How much do you charge? I made 23k last year on a 1099, have a home studio -- my entire living room plus closets etc.
AND
Can I use the $41.00 a week expressbus/subway pass as a deduction? I use it to take me to absolutely everything. Cabs are just too expensive anymore.

Thanks for all the info.

Best regards,
Caroline


Hi Caroline,

"... she has a good heart but severe anxiety issues." Were she your friend you'd help her. As your tax advisor, get rid of her. .

Saying that you owe 15K means nothing because it's a stand alone piece of info. Sort of like my asking you if the blue watercolor that I have is a good painting.

Also, there is no way that you could owe $15,000 if your only income were $23,000 gross self-employed income.

Subway expense is deductible if you are going from one business location to another. Here's lots of info on that if you check out the auto expenses category on my blog.

Based on your questions and accountant situation, before you make any decisions about a new tax pro, you need information -- more than I can give in an email. The least expensive, easiest way to get a basic understanding of indie taxes is to read my book, Self-employed Tax Solutions. Here's a link to the table of contents . See what you think. And here's a link to purchasing -- about $13 on Amazon.

I can send you more information on my services and how I work with new clients, however, I think your first step should be in the direction of educating yourself.

Best,
June


Thank you, June. You are very kind and generous with your time. I will buy the book and take it from there. You have really helped me just with this e-mail. because when it comes to money, I just assume I’m making the wrong and bad choices.

All the best,
Caroline


You are most welcome, Caroline.

When in doubt about your own skills with money, think about putting a paintbrush or sculpting clay in the hands of a typical accountant. What would you end up with?!

Always ask questions when interviewing a tax pro . Then make your decisions not just on the answer but how your question was received and how the answer was presented.

Good Luck!
June

PS
I might use our email on my blog. If I do I won't use any identifying info.


June -- That is soo great, transforming anxiety and angst into something that could help others with number dysfunction. I look forward to seeing it on your site. Also I have forwarded the blog/site address to lots of friends with similar fear.

I eagerly await the arrival of your book.

Happy holiday!
Caroline