Can business expense (from Schedule C) counted as Credits on Form 1040-ES?

Question

For a 1099 contractor during 2006, is the business expense calculated from schedule C be counted as "credits" or "itemized deduction"?

I'd like to use the standard dection, because stanadard deduction is higher than itemized deduction. If I do that can I write off business expense as "Credits" on line 9 of Form 1040-ES to reduce my estimated tax?

Answer 1

Use a Schedule C to figure your business profit to include on Line 1. The Schedule C expenses do not appear by themselves anywhere on the 1040ES, they in particular are not part of Line 9.

The standard or itemized deductions (from Schedule A) appear on Line 2 and your business expenses do not figure into either of these amounts.

Answer 2

Sales Taxes and Income Taxes are not the same and are not filed together. I don't know what state you are in (sales tax laws vary state to state) but goods that you sell for retail are subject to sales tax. You are not responsible for the sales tax expense (your customers are- you must charge them the sales tax) but you are responsible for paying the sales tax you collect to your state's sales tax department. If you are required to collect sales tax but don't, then you are required to make up the difference. I suggest that you get a CPA to help get this straightened out. They will show you how to calculate and collect the tax. They will also file the sales tax returns for you or show you how to do it. Don't fool around with this. I worked for a CPA firm for 15 years in New York and I have seen numerous businesses close because they failed to properly collect and pay their sales taxes.