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Q:

Subject: Quickbooks Classes

 

Hi!

 

After reading your page on the web on classes we are playing with combining our 12 QB data files into one. The question that we have is about sub-classes. We have 10 properties that are under the owner’s Tax ID and two other properties that we manage that have 2 different Tax IDs. Is it possible to have the first 10 as subclasses with our owner as the class and have the other 2 under their own separate classes?  Or, do we need separate data files for each Tax ID number? What is the best way for both ease of use and, more importantly, tax purposes?

 

Thanks, 

A:

I guess it would depend on what the purpose of your bookkeeping is.  If you are acting as a property manager, you could have one master data file and have a class for each owner, with subclasses for each property.  You could then print out separate P&Ls for each owner. 

This would work well for P&L purposes, but wouldn’t do the job properly if you are keeping track of all of the assets and liabilities and each owner needs a balance sheet, which can’t be separated by class.  In that case, a separate data file for each owner would make the most sense because you could prepare all of the different financial statements required for each owner’s income tax return, as well as 1099s.

I hope this helps.  If you have more details on what accounting services you provide for the other property owners, I might be able to provide more setup advice.

Kerry Kerstetter 

 

Q:

Subject: I would like to get some advise

 

Dear Tax Guru,

I have come across your website after doing a google search for “S Corporation vs: C Corporation”. I was so happy to find you! I started a business in 1992, and paid big bucks to an accounting firm to advise me on the best way to set up the business. They advised me to elect the “S” corp, and only explained the advantages of doing so, and none of the disadvantages. Boy was I shocked the first year I had to pay personal income taxes on $80,000 of income that I never received, and never would receive. I am not trained in accounting or finances, but even I figured out that being a c corp was more beneficial to me in many ways. No accountant that I ever talked to about this has agreed with me, or helped me figure out how to change the situation. They seem to think that the more taxes I pay, the better.

 

Therefore, I would like to set up an appointment to talk to you about my situation, and the best way for me to proceed. 

 

Thank you in advance,

A:

It does sound like you do need to find a personal tax advisor who is on the same page of wanting to help you minimize your taxes.  It is a disgrace that so many tax pros do consider it their purpose in life to assist the government in collecting more taxes.  How they can have a clear conscience when charging their clients for that kind of work has always stumped me. 

There are plenty of that type of tax pro around the country.  However, there are also plenty of tax pros who share my philosophy that we should be helping our clients to do everything legally available to minimize their taxes.

I wish I could be of more help to you; but I already have too many clients to take care of; so we are still trimming back on the difficult clients and are not accepting any new ones at this time. 

Unfortunately, we don’t have anyone to whom we could refer you. If you haven’t already done so, you should check out my tips on how to select the right tax preparer for you.

Good luck.

Kerry Kerstetter

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