annual self-employment taxes before the year is up?

I've been self-employed for about a year now, and unfortunately it only recently dawned on me that I may have to pay self-employment taxes every quarter, as opposed to paying them at the end of the year. In case you've never had to deal with this, the government states that you're supposed to be collecting your own taxes throughout the year as your employer would do if you weren't self-employed. Every quarter you're supposed to send in a check for your "expected" income tax. However, there are a few problems with this concept.

For one, your business is so new and the income is most sporadic and you have no financial history to estimate what kind of profits you're going to see. For another thing, starting a business sometimes requires heavy start-up costs so you can't really afford to screw up and underpay your quarterly taxes and get charged a late payment fee. To determine if you have to pay quarterly or settle up at the end of the year, you need to fill out your regular income tax forms now. Yes, we're talking the 1040, schedule C, etc. etc. - all before you've even started making money, since you need to have it set up prior to first quarter. Talk about impossible. Plus, the last thing I feel like doing is filing out all of my income tax forms with imaginary estimated figures.

Accounting has got to be the worst part of being self-employed, especially for those of us doing internet businesses that deal in things like affiliate marketing. You've got a million different things to track, using several different types of paperwork or software, and few if any of them can communicate with one another. You've got Paypal for your incoming online payments, you've got adwords for your advertising costs, google analytics for tracking traffic, commission junction for your sales commissions, random paper expenses and bills, microsoft excel (or open office calc) for sales tracking, microsoft money or quicken for your banking...geez. Wouldn't it be nice to have some sort of financial consolidation software that takes all of this into account and figures out the relationship between all of these items for you, and then spits out the appropriate populated tax forms at the end of the year? Talk about some dream software. I'm not sure such a product exists. If it did, it would have to incorporate the changes and software updates of all of these products (plus the annual changes to tax forms each year) rolled into one, which is asking a lot.

At this point, I guess it is more profitable to force business owners to use professional accounting services and keep them guessing by occasionally making changes to the tax laws. Or maybe it's part of the government's plan for keeping the economy strong, since that is all they seem to really care about. After all, you need to think of all of the jobs that would go away if filing taxes was actually easy. But then again, think of all the businesses that might be able to better optimize their finances (and possibly stay in business longer) if they could get past the initial hurdle of their taxes.

accounting software by sage

A recent press release for DSD Business Systems' accounting software San Diego caught my eye, as they advertise software solutions for small to medium sized businesses. Their press release indicates that they specialize in the Sage MAS 90 and 200 software platforms and offer all types of enhancements and custom features for these titles. Unfortunately, for a business owner who isn't accustomed to any type of accounting software, their press release is a bit confusing. It would appear that they are only interested in customers who are already using these Sage solutions, who may need upgrades and/or help with more advanced features.

A quick trip to the Sage homepage provides more information about their software, as well as an automated tool to assess your CRM and accounting needs and match it with their product line. It appears that for my type of business, adding their e-Business manager to the MAS 90 allows for accepting and tracking orders over the web.

The DSD site features a page of free tech tips for Sage users that would certainly be bookmark worthy. They cover such popular topics as payroll, inventory, taxes, and of course sales reports. If you are looking for an accounting platform and expect that you will require customization and assistance to streamline it for your business, I would suggest checking out DSD.

accounting help

Speaking of business startup issues, I just ran across a new bookkeeping service for small business owners while thumbing through the latest PPP opps. The company is called Accounting Paradise.com and they specialize in quickbooks accounting. With bookkeeping starting as low as $10 a month, you can begin to "outsource your headaches" to them. They remotely manage your account via Quickbooks Online and charge a simple flat fee based on how many pages worth of transactions you end up with.

In a nutshell, this is a way to cut through the hassle of hiring someone specifically to do your routine accounting. One other thing that I like about them is that you don't have to sign a contract of any sort, so if you're not happy with their results you simply take your business elsewhere. They even state that their work is done in the most understandable way possible, should you decide to take it on yourself or move it to another service in the future. I'd still recommend having a CPA check your books each year, though, just to make sure that you are taking advantage of all possible tax incentives. I should also mention that this company offers payroll services starting for as little as $1.99 per employee per pay period, as well. Now you can afford to act like the "big boys" without the "big boy" staff needed to run things.

Less headache for small business startup is always a good thing...
I'll keep looking and post other ideas as I find them.