Who are you?
Eric is the founder and mastermind behind Accountlancer, a business dedicated to showing you how to start managing taxes as a freelancer. Eric believes in following the rules, especially when it comes to taxes, and helping other freelancers so they don’t fall prey to the IRS. He hates all types of paper, can’t stand staples, and believes in making things super easy for the freelancer that’s confused about anything tax related.
Eric was born and raised in New York (his accent gives it away almost immediately) and now he resides in south Florida. Eric was working a corporate job when a friend complained that there weren’t any accountants who understood the pains of freelancers preparing for their taxes. After playing around and looking for website names, Eric hit the jackpot with Accountlancer.
Since then, Eric has helped hundreds of freelancers in managing their taxes, and now he doesn’t have to worry about a single piece of paper (he does everything electronically). It’s as if he is making managing taxes as a freelancer fun…almost.
When should someone consider getting an accountant?
Eric believes that there are two main things to consider before getting an accountant. For one, you should be able to afford to hire an accountant. If you know you can afford one, then the next step is to see if you need to outsource your accounting tasks. If you are losing too much money from overhead costs and bookkeeping, it’s time to look into bringing on an accountant.
While Eric knows that not every freelancer will need an accountant right away, he thinks it’s important to know your options. Researching tax filing systems, accountants, and even bookkeepers can help you make a better decision when it comes to managing taxes as a freelancer.
What’s the difference between accounting and bookkeeping?
Eric considers bookkeeping as the beginning and foundation of managing money in your business. Bookkeeping involves data and having your information in a system, such as Quickbooks or a spreadsheet.
Accounting is step above bookkeeping, because it makes use of the data you are recording, and analyzes it to make sure you are on a straight path. An example of accounting would be looking at your data and information to see if you can start outsourcing parts of your business. While a bookkeeper would have those numbers, an accountant will help you understand them and give you advice on how to push forward.
How does the accountant/client relationship work?
An accountant and client relationship should always be a two-way street. The client will supply the accountant with information to create a foundation. Then, the accountant will give the client access to see how everything is connected together. Communication is super important when you are learning about managing taxes as a freelancer.
Other useful information on accountant and client relationship’s to remember include:
- Asking your accountant any questions you may have about the money in your business. It’s important that you are comfortable asking for direction if you are unsure.
- Choose an accountant that understands the basics of a freelance business. For example, many freelancers don’t work specific hours, and finding an accountant with flexibility would be a great option.
- Realize that an accountant is there for the facts and numbers. They are supposed to make your emotional decisions about money in your business a little easier.
How much does it cost?
Eric says that costs vary across the board, but a general idea for a price is that the less time an accountant has to work on your business, the cheaper it will be. Bookkeepers may charge an hourly fee for the work they complete, but an accountant may charge you a flat monthly fee (also considered a retainer).
Eric knows that it can be hard managing taxes as a freelancer, on top of all of the work that needs to be done in your day to day business. He recommends performing a trial run if you are apprehensive about outsourcing your bookkeeping and taxes to an accountant, to decided if they are the right fit for you. That way, if it doesn’t work out, you aren’t out of a lot of your hard earned money.
Questions from the community:
Diana of The Small Business Startup: I’m Curious about knowing more about making donations or tithing and possible benefits we may not be aware of as entrepreneurs.
Eric’s Answer: While things may change because of our new president, as it stands, charitable donations are not considered a business expense if you are a sole proprietor, single member LLC, or an S-Corp. However, don’t let that stop you from giving money to a charity if you believe it is the right thing to do, or if you just enjoy giving.
Vanessa, a member of the Make Money Your Honey Facebook group: I am an Occupational Therapist and every so often I work as an independent contractor and file as an S-Corp with my company’s name. S-corp and C-Corp for independent contractors, what is the biggest difference?
Eric’s Answer: The biggest difference between the two is you are double taxed as a C-Corp. For an S-Corp, you are only taxable at your federal rate. Then, when the next year rolls around, you’ll take out the net income from the business. Essentially, you’ve already paid taxes on that money, so you get the distribution tax-free.
What’s one tip listeners can implement right away to improve their finances?
To not follow a piece of financial advice just because it’s given to you. Financial advice is not a one size fits all type of thing. Take what you need from it, but don’t worry about changing who you are to fit the advice.
How do you make money your honey?
By not getting emotional about it. You have to realize that money isn’t everything and take some time to experience life doing what you love, the money will come.
Where can listeners go to find out more about you?
- Business site – AccountLancer
- Personal Site – EricNisall.com
- For people wondering if they should be sending 1099-MISC – Is Your Accountant Charging You For Unnecessary Work?
- For people who are the victim of duplicate income reporting – What To Do When You Wrongly Receive A 1099-MISC
Resources Mentioned Or That Add Value to This Episode
- The College Investor – This is where you can find reviews of tax software.