Q:

Dr. M

I am new in practice and just paid my year 2000 taxes. Many of my 
friends tell me I should play the game and learn how to avoid taxes. I 
am new at this and have no idea what to do. I am not incorporated 
and work by myself

Thank You

A:

Thanks for the e-mail. First some sage advice .. don't mess with the 
IRS and for sure .. this forum will not be used to advise any IRS 
cheating. Therefore .. before you get into any deep trouble .. find a 
competent accountant. If you live in the Atlanta area I would 
recommend mine. Ask around and get some advice from some other 
DC's in your area on who they use or ask your state association on 
who they recommend possibly one or two promote the association. 
There are many deductions and tax planning as a new DC that an 
accountant can help you with and can also save you money without 
the headache of possibly doing the wrong thing. 

As a sole non incorporated business person you must send in 
quarterly estimated taxes. The IRS doesn't trust you giving them 
money at the end of each year .. they want you to give it to them each 
quarter .. you or your accountant must come up with an estimate of 
potential income and pay the appropriate federal and state taxes on 
time. Trust me it all adds up and this is the nature of business .. you 
get in one hand and give plenty with the other. Wait .. your expenses 
will only increase as you grow and there will be insurance  .. 
mortgages etc .. you need to have someone work with you on 
managing the books.

So .. the first estimated State and Federal taxes should have been 
paid April 15 .. teh same time you paid your 2000 taxes. The next one 
is June then September and January 15th .. and the cycle continues. 
You probably missed the April .. don't get too behind.

This is the advice I gave my students when I taught at Life. Open 
three accounts at a discount broker .. I use Schwab .. 1-800-435-
4000. Open one margin account .. you may need $10,000 to start it .. 
if you don't have it .. just open a regular money market (checking) 
account .. and if not at Schwab .. at this point .. at any local bank. 
Next open a regular savings account and third open a Roth IRA. Even 
if money is scarce .. you should begin the habit of retirement savings 
.. you will thank me 15 years from now when this early start of 
savings has paid off.

Okay .. money has to be put away for the estimated taxes weekly .. 
don't touch it as it has to be there on the dates above or you will 
have to borrow for it. You cannot be late with taxes .. the penalties 
and red flagging is not worth it. The second account .. savings .. it 
just that and to live on. The third about10% of your collections may 
go into the Roth IRA. Have the money for the taxes .. those that tell 
you to play the game ask them how they do it .. everyone plays the 
game of paying the least amount of properly due taxes .. question is 
how do you determine what is due. You are no longer a student .. you 
need professional help

Have a Great Day

Dr. M