My name is Mitch Mitchell, and I’m an independent consultant.
Many years ago, I was used to doing my own taxes. My income wasn’t anything special at the time, so it was pretty easy to do. However, even though it was easy, my wife and I were getting creamed on taxes. Still, we were able to pay them, so we continued going along like normal.
Then I had a really good year. Once again, I did my own taxes, and thought I’d taken care of everything. That is, until I got a letter from the IRS saying I owed them just over $25,000. I couldn’t believe it, based on how much I’d paid out, and I was in shock.
I knew that times had changed, and I really needed a professional. Terri and I were part of a training class and I’d gotten to know her very well. I was comfortable with her so I presented my issue to her and asked if she as an accountant could help. She said absolutely, and that began our association.
I ended up stringing two very good years together, but I hadn’t hired her soon enough to prevent my owing a lot more to the IRS after the second year. Per her recommendation, she said I need to be incorporated, which would allow me certain tax breaks. She also counseled me on how to maintain my receipts for expenses, and told me other things I could claim, since I was traveling a lot at the time.
She also recommended a financial analyst to help me put some money away. That worked very well also.
By being incorporated my tax liability issues went away. As a matter of fact, my expenses turned out to be so high that I for a few years I didn’t owe any taxes whatsoever; that was nice. What was even sweeter is that two years ago my wife also went independent, and last year we got our first tax refund ever! Without having an accountant, I doubt we’d be having the kind of success we’ve had.
If you’re in business on your own and you’ve been doing your own taxes, stop! At the very least meet with an accountant and let them see if they can do more to help you protect your income and your assets while lowering your tax liability. It’s much better than taking a once a year trip to the mall and allowing a tax company to do your taxes. Trust me, I did that once and my wife and I weren’t close to getting a refund.
