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Ask HN: How do you stay on top of legal work and/or taxes?

5 points by tylerdmace ↗ HN
I recently received a letter from the State of Utah detailing an owed debt of 3k dollars - 2500 dollars in taxes and 500 in fees/penalties. We formed an LLC entity in late July of last year and have not made any revenue yet. I don't know where I went wrong but I also don't have a great deal of time to look into all the possibilities.

Because of this, I've debated hiring an accountant or paying for a pre-paid legal service to help me overcome these types of problems (of ignorance). What are you thoughts here? Should I just stop what I'm doing and spend a week or two learning as much as I can about the legal processes in which my company is bound or should I pay to have someone walk me through it? What are you doing yourself?

4 comments

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skmurphy
Pay an accountant familiar with Utah tax law. It's possible that you owe much less than the state is asking for. You want someone who has been in a business tax audit before, the learning curve can be steep.
ScottWhigham
Wow - that sounds like a mistake on the state's part to me so I second the suggestion to get an accountant there.

And to answer your question: I just do. Barely. Enough. I think. However, I've done it for 15 years and I learn a bit more and become a bit more efficient each year.

hga
I'm sad to say that after the 1986 tax "reform" bill I just gave up on this sort of thing and became a wage slave.

I know from my father that it's a lot of work to keep up on this sort of thing; having an ongoing relationship with a lawyer, retaining an accounting firm, and paying a lot of attention to the issues (back in the bad old days that entailed subscribing to several good newsletters) seems to be safest path. (Check my account and email me if you want me to put you in touch with him for how he did this for 5 or so decades; you might say that startups are in my blood.)

For your case, unless you want to fold the company, it's necessary for you to find out what's going on. If you made a mistake, just paying off this demand is unlikely to prevent ones in the future. If you didn't, well, if you can figure that out without spending too much money you then know you have a $3K legal and accounting budget (minus your opportunity costs) to try to set it right.

jacquesm
Those are the two items that I've contracted out.

Legal stuff is usually so specific to the case at hand that you even have to shop around for a lawyer that has the required expertise, accounting is something where small slip-ups can cost you a fortune, your business or a lot of hardship.

Keep in mind though that even if you contract this stuff out you are still responsible. So you should know at least enough about it that you can spot it when things derail.