The answer is yes, it is possible to do your own taxes. I do mine and I have two LLCs and a sole proprietorship. I did use a very good accountant and learned most of what I know by working with him, which is why I can do my own taxes today. If you have never done them yourself, you have a couple of options. All of the rules that apply to you related to your taxes are online and available for you to read. You can always give it a go yourself. Or, you could use a good CPA for your taxes and learn from them how to do it.
In the end, I would definitely recommend being educated in tax law because you are responsible for your taxes, not your accountant. I have found that accountants can be very incompetent (though not all are, for sure, so please don't flame me for that). If they mess up, they can get in trouble with their license and may have some liability, but the IRS is still going to hammer you.
I can give you a couple of pointers, I think, that might help.
At the end of the year, you need to file an 1120(s) with the IRS. This is basically like a schedule C for a sole properietorship except that it includes balance sheet and distribution information. You also file a K-1 for each shareholder. That tells the IRS how much captial gain or loss is attributed to the shareholder. If the shareholder owns the stock for more than a year, and it is a qualified, the gains are taxed at the capital gains rate. Otherwise, they are taxed at the personal income tax rate.
Here's the kicker... with a sole proprietorship, when you lose money, you deduct that lost from the AGI directly using a schedule C. With an LLC, you are capped at $3K for losses in a particular year.
So this leads me to my last pointer that you might want to consider. Don't organize as an LLC in the beginning if you know you are going to lose money for a tax period IF you aren't going to transact business with customers during that period. In otherwords, as you are starting a company and losing money before you ever have your first customer, it is advantageous to be a SP so you have no cap on the losses. However, if you have customers and your transactions with them create any kind of liability, you definitely want to consider the protections of an LLC. Oh, I forgot, you also might want to use an LLC if you are taking on liabilities from creditors even if you don't have a customer because you still want the protection from the LLC.
- Yes you can do your own taxes, but you might want to consider using an accountant for the first couple of years if you are not comfortable with your knowledge of tax law.
- You want to become knowledgeable about tax law regardless because you are responsible for your company's taxes, not your accountant
Prefer a sole proprietorship over an LLC if you know you are going to lose money but don't need the liable protection of a corporation. This lets you claim all of the losses.
MOST IMPORTANTLY - I am not a CPA or an attorney. My advice is from experience and could be 100% wrong. Hopefully it is not, but I am making no guarantees. My explanation of 1120s's and K-1's was way oversimplified and your cirumstances may result in different limitations than I have seen with my companies.
Please... if you know that something I had said here is wrong, speak up. I love the idea of this site and it will work its best if we give as much, and as correct, information as possible. Hopefully, people using this site won't have the painful learning curve I had and am still having.
Hope this helps.