Just hire the accountant
I just wanted to textually echo Marco Arment’s advice to hire an accountant. It fits in well with the “do what you’re good at so you can pay someone else to do what they’re good at” message I tried to get across a few RSS entries ago.
As I mentioned in that post, I had a DIY mindset for the longest time. I used to do my own taxes, too. As an actuary, not doing my own taxes made me feel like a painter paying someone else to paint my house. After all, taxes are just based on simple arithmetic and goofy rules for where to plug the numbers.
Fortunately I came to my senses last year.
As I’ve started doing more work on the side, and especially since I formalized my extracurricular income-generating activities by starting an LLC, having an accountant on my “payroll” is now invaluable.
Caveat: Understand that hiring an accountant does not mean take your taxes to one of these counter service places (you know the kind). Instead, find someone who really wants to work in your best ongoing interests and who returns your emails and calls throughout the year, not just in April.
If you’re like me, you’ll probably be shocked at just how little a good accountant costs, and you’ll probably see an immediate double-digit ROI on what you pay them. My accountant found some really nice (and totally legitimate) home office deductions I hadn’t been taking. The tax savings paid for his services many multiples over.