need help on how much to pay in federal taxes?

Question

my first quarter income was almost 7000 ihad to pay state 350 dollers and federal 1500 why so much and how much do i have to pay this time my income went down to 3000 i payed 117 how much do i pay federal they said its 15 % im confused im a small homedaycare.

i would really like a accountant but like you can see i really dont have much income to beginn with does anybody know how much they cost

Answer 1

The minimum federal tax bracket is 15% so you pay 15% of whatever amount you earn each quarter. And seeing that you overpaid your first quarter taxes (since 15% of $7000 is only $1050), you will receive a refund when you file your tax return next April. However, you said you run a daycare, so any expenses you incur to run your business, like food, toys, etc. are tax deductible items so when you file your tax return next April, you should itemize these tax deductible items instead of taking the standard deduction and it should lower your tax. And you do not need to hire anyone to do this for you. You can do it yourself, just follow the instructions for each line on the 1040 form.

Answer 2

If you're self-employed, which you would be if you own and are running the daycare and not working for someone else, you will owe a self-employment tax (is basically social security and medicare) of 15.3% on income (what you take in minus expenses) up to $90,000, in addition to any income tax due. Self-employment tax is calculated on Schedule SE and the total is added to your income tax by copying it from SE to 1040. You'll also need to file Schedule C for your business income and expenses. Income tax amount would depend on what you take in minus your expenses of running the business, and if you're married, your spouse's income if you file a joint return. You should probably consult an accountant, at least for the first year, unless you know quite a bit about income tax law. After that you might be able to do it yourself following the pattern of what the accountant does the first year. But laws change each year, and you'd have to keep up with that to do it yourself. The IRS has tax publications for small business owners - you might call them and ask them to send them to you, or read them online at www.irs.gov, to get an idea of what you need to do.

Answer 3

Sounds like you need a good accountant rather than just general advice. I would contact the business manager of a major child care provider in your area and ask who they use to do their books. It is important to get and accountant who really knows your business and can suggest more items you can deduct from your taxes. Besides, when you hire and accountant to do your books, their name is put on your taxes so they are responsible if there is a mistake.