J and I have been self-employed for several years now, and I have always been the CFO, accountant, and book-keeper for our business. It’s worked quite well so far (with lots of help from on-line tax software). There have been some glitches along the way, like when we finally started earning enough money to owe some real taxes, and I didn’t realize that self-employed people pay more social security/medicare taxes than W2 employees (the ’employer match’ doesn’t do much good when you are your own employer). So when I did our taxes that year, we ended up having to pony up an additional seven grand before April 15th. Ouch. That definitely pushed our out-of-debt-day out a bit. But I digress. Overall, I’ve done pretty well at handling our business income issues. I keep track of 20 1099s every year, and about 500 receipts for business expenses, all tracked in a book I keep in my desk drawer, and added up each month with a calculator. I know I should switch over to a computer system for that, but the book is comforting to me. I can’t explain it – it just is. Maybe in 2007.
But this year, we took the plunge and incorporated. We’re now an S-Corp. Whoo hoo. Sounds great, but it brings with it a mountain of new paperwork and taxes to file. Some things need to be filed quarterly, some yearly, blah blah blah. I was a math major until my senior year of college when I decided that double majoring in four years was getting in the way of sleeping, and settled for a math minor. So number crunching doesn’t bother me. But IRS code and their ever-changing regulations are not as much fun. After one day of trying to research what I needed to to for our payroll, I decided to find a payroll service. I found one for about $50/month, and the same day I switched two of our phone lines over to vonage, saving $100/month. That way I could justify paying someone else to take the headache out of payroll.
Last week, I started looking into what other stuff we needed to file with the IRS for our little S-Corp. Headache time again. Finally, I called a client we have who has been an accountant since 1985. I’m meeting with her next week, and she’s going to set me straight on everything we need to do. An hour with her will cost me $115 – but the relief I feel just knowing I’m going to be talking with someone who knows what the hell she’s doing is worth $115 already. This is another one of those times when I feel just fine spending money. I’ll be frugal again tomorrow, I promise.