Lets say that i made 15000 this year go to school and run my own business.How do i figure what i have to pay in?This is my first year running my own business help please.......
2006-12-26 08:34:14 · 3 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ Other - Taxes
they got tax cd roms for that
2006-12-26 08:41:18 · answer #1 · answered by kwon 1 · 0⤊ 0⤋
For federal, you'd file a Schedule C or C-EZ, depending on how complicated your business is. On this you'd show the income and expenses for your business. There are usually quite a few expenses you can deduct - it might pay you to see a CPA (not H&R Block) this first year to find out what you can take off.
The net income for your business goes on your 1040, then you figure your taxes from there pretty much the same as a person with wages from an employer.
When you get down toward the end, there will be a place for self-employment tax. This is for social security and medicare. You'll fill out a form 1040-SE to figure the amount, but it's basically 15.3% of your net from your business (not 1.5% as a previous responder said).
State and local income taxes vary by location. If you see a CPA, they'll be well qualified to advise you on those also.
2006-12-26 20:16:47 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
First of all, it depends what state you live in. Some states do not charge state income tax (FL, TX and NV). Some cities charge local taxes (NYC) on top of federal and state. If you live in a state where no taxes are charged, then you only worry about federal and local taxes. In California, you may have to pay federal, state, franchise, employment and sales taxes.
First, start with your filing status (single, married filing separately, married filing jointly, head of household, widow(er). Once you know this, then you can work off of your exemptions and then you input your income.
Once you complete this, then you can write off your business expenses directly related to your business on the appropriate form. If you have a corporation, it is another separate form. If it is a partnership another form and so on.
The self employment tax is on the net profit of your company which I believe is 1.5% at present if you are self employed. Good luck.
2006-12-26 16:43:05 · answer #3 · answered by Anonymous · 0⤊ 1⤋