RE: Anyone ever heard of this book or program]

["Russ Seligman" <rseligman -at- enkata -dot- com>]

>BEFORE I used the service, I had the taxes all screwed up. Then I
remembered,
>I'm a writer, not a tax person.  So, I hired people to do those tasks
for me.

Perfectly reasonable. My contention is that the only person you need to
hire is an accountant. Am I missing something?  I personally don't see
the benefit of paying $420/year for:

>(1) to run my payroll, (2) take the $$ out of my business account, (3)
pay the taxes,
>(4) direct deposit my paycheck into my personal account, and (5) file a
report w/my
>accountant.  

where (1) and (2) aren't really services, (4) is a trip to the bank, (5)
is simply providing your accountant with a tally of your income (easily
handled by Quicken or even Excel), and (3) is sending the IRS a check in
the amount told to you by your accountant.

It seems to me that all the service provides is a means to pay your
withholding taxes at the time income is received.  Instead, you could
skip the service, keep your full gross pay yourself, and then once a
quarter your accountant tells you how much to send to the IRS.
(Remember, my suggestion was to skip the payroll service only if you
have a qualified accountant helping you; without an accountant, I agree
the taxes become very complicated.)

The "discipline" comes in putting something aside for taxes and not
spending your full gross pay.

Obviously each person should talk to their accountant and determine
what's best for them. But if I'm missing some more obvious benefit of a
payroll service, I'd truly like to understand what that is.

--Russ


-----Original Message-----
From: bounce-techwr-l-115379 -at- lists -dot- raycomm -dot- com
[mailto:bounce-techwr-l-115379 -at- lists -dot- raycomm -dot- com] On Behalf Of
janet -at- fuse -dot- net
Sent: Wednesday, November 13, 2002 1:50 PM
To: TECHWR-L
Subject: RE: Anyone ever heard of this book or program]



Russ,
Using a payroll service doesn't make you "employed" by the payroll
service.  You are employed by your own company, which hires the payroll
service to cut you a check from your business account and files all your
taxes with the appropriate govt agencies.
 
Cost-wise, it's a deal: I'm paying my payroll service $35/month to run
my payroll, take the $$ out of my business account, pay the taxes,
direct deposit my paycheck into my personal accout, and file a report
w/my accountant.  

Every quarter, I visit the accountant, review revenue/expenses and make
sure I'm OK tax-wise (about $225/qtr).

BEFORE I used the service, I had the taxes all screwed up. Then I
remembered, I'm a writer, not a tax person.  So, I hired people to do
those tasks for me.

It's not a matter of discipline. It's a matter of spending your time
where it makes the most sense -- billable hours. As for deducting
business expenses, the accountant and the payroll service are fully
deductible. <snip some email>

> Or, if you do #3, then don't bother with #4 and save the fees you'd 
> otherwise have to pay the payroll service.  Doing both is like saying,
"I want to pay someone else to deduct taxes from my paycheck instead of
doing it myself."  If you are disciplined enough to tuck away about 45%
<snip>
> > and let the accountant handle it. It will make your taxes more 
> > complicated and your accountant more expensive, but that's probably 
> > less than the cost of the payroll service.
As an independent contractor, you also have tax deductions available
<snip>
> > Although a payroll service might provide additional corporate 
> > benefits (401(k), insurance, etc.).  It's certainly a personal 
> > decision which route you go.
> > 
> > --Russ
> 



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