Thursday, January 19, 2012

tax time

It is tax time again here at OSB world headquarters.  The quarterly taxes are easy, the fun stuff is working through the various paperwork for annual corporate filing.  North Carolina requires a balance sheet to be submitted while the federal return does not.  If you are not always on top of processing transactions via Quickbooks or another accounting program, or heavens forbid you have your tax-lines mapped incorrectly, or if Quickbooks made some updates that have funked up your previous lines for some reason, what should/could be a mostly seamless process between Quickbooks and Turbotax instead takes a full day or two to work out.  Good times.

This also is the time of year I sit down and realize how many costs are associated with operating a corporation vs a sole proprietorship.  If business stuff bores you, stop reading now.  A corporation provides some level of protection between the individuals that operate the business and the business itself, while a sole proprietorship does not. A corporation can also have multiple investors, while a sole proprietorship by definition, can not. A corp can grow into different operations; SP is somewhat limited to what the individual can do. 

However, for a small business there are a number of basic costs that you have to factor in right off the top:  articles of incorporation (1-time), annual filing fee (yearly), city/county filing (yearly), some sort of advanced accounting service (ongoing), payroll service (ongoing), and employer tax contributions to FUTA & State unemployment insurance (ongoing). There is also the labor cost of all the paperwork. 

This is all essentially unrelated to the operation of the business - the coaching, training, clinics, and so on.  I keep telling myself, accounting is fun.

But then I get to post stuff like this.  ;)

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