Navigating Tax Season 2023: A Guide for NYC Stagehands with Side Businesses

Tax season can be a daunting time of the year, especially if your financial situation is a bit more complex than the average taxpayer's. If you're a NYC stagehand with multiple W-2s, a small sole proprietorship LLC, and a family, you likely have various sources of income and expenses to consider. In this blog post, we'll discuss how you should proceed for your 2023 tax filing, taking into account your unique financial situation. Please note that while we can provide general advice, it's crucial to consult with a tax professional or tax advisor for personalized guidance.

Assess Your Tax Situation

Before diving into the specifics of your tax situation, it's essential to understand the components that make it unique. Based on the information you've provided, here are the key elements to consider:

1. Multiple W-2s: As a stagehand, you likely receive W-2s from different employers. This means that you have income from various sources, and you should gather all your W-2s.
2. Sole Proprietorship LLC: You have a small business that operates as a sole proprietorship LLC, selling gadgets through platforms like Etsy and Square. This business income adds another layer of complexity to your tax situation.
3. Married Filing Jointly: You're married, and your spouse has one W-2 employer. Filing status can impact your tax liability, so it's essential to consider the implications of filing jointly.
4. Two Kids: If you have dependents, such as your two kids, you may be eligible for certain tax credits and deductions that can reduce your tax liability.

Assessing these components is the first step in understanding your tax situation and determining how to proceed for your 2023 filing.

Business Income and Deductions

Your small sole proprietorship LLC introduces the need to account for business income and expenses. It's important to maintain accurate records of your business transactions, including sales, expenses, and deductions. When using platforms like Etsy and Square, you'll likely receive 1099-K forms, which report your gross sales. You can deduct business expenses related to your gadget-selling venture, such as materials, shipping costs, and other legitimate expenses. Ensure you keep well-organized records of these transactions to support your tax claims.

Separate or Combined Returns?

The question of whether to file separate personal and business tax returns or combine them into one largely depends on the complexity of your business and personal finances. Here are some considerations:

1. Combined Return: If your business is relatively small, has minimal income and expenses, and doesn't involve complex accounting, you may consider filing your personal and business income together on a single tax return. This can simplify the process and potentially save on filing fees.
2. Separate Returns: However, if your business is more substantial, with a significant amount of income and expenses, it might be advisable to file a separate tax return for your LLC. This can provide clearer separation of personal and business finances and may be necessary to take full advantage of certain business-related deductions and credits.

Tax Software or Professional Help?

You mentioned using TurboTax in the past, which is a popular tax preparation software. For many taxpayers, especially those with relatively straightforward tax situations, tax software can be a cost-effective and convenient option. However, given your evolving financial circumstances, it may be a good time to reevaluate whether it's the best choice for you.

Here are some factors to consider:

1. Software Limitations: Tax software is designed for general use and may not fully address the intricacies of a small business. It may not guide you through the complexities of business deductions, depreciation, and other business-specific tax matters.
2. Tax Professional: Considering the complexity of your tax situation with multiple income sources, a business, and family, consulting with a tax professional or tax advisor is strongly recommended. A professional can provide personalized guidance, ensure you take advantage of all available deductions and credits, and help you avoid costly mistakes.
3. Cost-Benefit Analysis: While professional tax services may come with a fee, the potential savings and peace of mind that come from accurate and optimized tax filing can outweigh the cost.

Conclusion

Navigating the complexities of a tax return as a NYC stagehand with a small sole proprietorship LLC and a family requires careful consideration. In 2023, it's advisable to assess your tax situation thoroughly, maintain accurate records of your business income and expenses, and consider the option of consulting a tax professional. Ultimately, the decision of whether to file separate personal and business returns or combine them will depend on your unique circumstances. While this article provides general guidance, it's crucial to seek personalized advice from a tax professional or tax advisor to ensure that you make the most of available deductions and credits and minimize your tax liability. Tax season can be stressful, but with the right support, you can navigate it effectively and with confidence.