Let’s Talk Taxes! By Shannon K. McDonald & Mary R. LaSota, Esquires
ou know this one: there are only two things certain in life: death and taxes. Well, as attorneys we’re pretty sure, up to a point, death can be ignored (unless you are an estate and trust attorney). But taxes, those are pressing. It’s June, you are rolling along and your practice is really soaring when “smack” you realize you have not paid quarterly taxes in a long, long time. Then there’s the headache that begins pressing at the base of your skull in mid-January that you just can’t seem to shake. There are some good reasons to pay attention to your quarterly and yearly taxes, and they’re not all because of the fines and penalties. First and foremost, get organized. In your first years of practice you may be able to handle your own bookkeeping and tax filing, but as your practice grows you will need expert help.
A Shoebox of Receipts Ok, someone may have done this her first year in practice, but after that I invested in a scanner, and I scan in every receipt, and file it in a designated file on my computer. My receipts are forever preserved and organized so that if the taxman ever comes knocking on my door I have copies for each tax year. I also keep a backup copy on the cloud. I don’t scan receipts every day, but when I see a pile of them sitting on my desk, it’s a nice way to ease out of my day as an officer of the court.
An Excel Spread Sheet For your first couple of years of practice you may be able to get away with using an excel spreadsheet to track expenses and income. The drawback is that it takes work, but if you’re comfortable in the fact that you were a business major in undergraduate school, and you have a brother who is a corporate accountant and will draw up a linked spreadsheet for you, this method works! Once you have all of the information entered, then you can use Turbo Tax to file your yearly taxes. Turbo Tax comes at various levels of free to not free, and the software will take you through the forms step by step. If information is entered correctly, the spreadsheet will have tracked your accounts over the course of the year and formulated things into deductible or not deductible based on your notations. Even if you use this method, keep copies of your receipts, just in case.
Bookkeeper As your practice picks up, your time becomes more valuable. Consider hiring a bookkeeper for several hours a week. The cost can range from $15 to $60 per hour. Some of the tasks your bookkeeper can handle include billing clients, paying bills, tracking Continued on page 11