Started business in June and haven't made estimated tax payments, didn't realize what I needed to do. What do I do now? I have made an average of 3.5k per month with lots of expenses. Will I have to pay a lot? What are the penalties?
2006-10-05 04:39:19 · 6 answers · asked by Johnny 2 in Business & Finance ➔ Taxes ➔ United States
Talk to a CPA. You should have been making estimated payments through the year, starting Sept 15 since you didn't start your business until June, but might skate by if you pay by January 15. If not, you might be liable for penalties, but shouldn't be huge. Be sure you're keeping good records of all your income and expenses. Your tax will be calculated on income minus allowable expenses, and a CPA can help you with what can be deducted.
In addition to the income tax, you'll owe self-employment tax - this is 15.3% of your income after expenses are deducted, and is the employee and employer parts of the social security tax. This amount should be paid quarterly also, to avoid penalties and interest.
How much you have to pay depends on how many expenses you have, your filing status, number of dependents, other income if any, and amount of itemized deductions if any.
Don't forget state and local taxes if they apply where you live. The CPA can guide you there also. You might be required to file quarterly for those also.
Congratulations - sounds like your business is off to a good start!
2006-10-05 14:34:00 · answer #1 · answered by Judy 7 · 2⤊ 0⤋
Everybody in business should have an accountant and a lawyer. It seems that you have a pretty good business. Most businesses don't make money in the beginning, and you are. The more you wait in taking care of this situation the worst it will get. Being a new business and with a lot of expenses, doest 't sound like a big problem. Hurry Up
2006-10-05 11:55:21 · answer #2 · answered by lm050254 5 · 0⤊ 0⤋
Talk to your accountant. If you don't have one, find one. Depending on the type of business, you may not have to make estimated payments the first year. You could start making estimated payments now.
2006-10-05 11:44:40 · answer #3 · answered by david d 2 · 1⤊ 0⤋
Suggest you ses the BBB they have people or know someone that can give you proper advice. SBA would be another resource.
2006-10-05 11:44:20 · answer #4 · answered by lobo 4 · 0⤊ 0⤋
Go to a CPA and get them to figure it out for you. They know how to do it right.
2006-10-05 11:47:45 · answer #5 · answered by S.A.M. Gunner 7212 6 · 0⤊ 0⤋
hire an accountant, they know all about that. You'll need a good one.
2006-10-05 11:41:50 · answer #6 · answered by Jenyfer C 5 · 0⤊ 0⤋