IN OTHER WORDS- Do we pay ourselves a salary? Or do we account for it as a dividend? We both work very hard and don't make alot at these craft fairs but enjoy what we are doing. BUT we don't want to have to pay to much in taxes for a profit in the business. WE also don't want to do the wrong thing! HELP!!!
2007-01-26 04:37:27 · 1 answers · asked by Nicole C 1 in Business & Finance ➔ Small Business
First of all....did you dba (doing business as....at courthouse) as a partnership? Or are you just calling yourself a partnership? If you just do this as a hobby then you should not have to pay too much since all you pay taxes on is your PROFIT. If you take your year's profit and deduct all your costs for materials, gas, mileage, traveling, advertising etc, etc,....there should not be much left to pay taxes on. Self employment taxes are approx. 30% of your profit.
2007-01-26 04:46:36 · answer #1 · answered by Yvonne M 2 · 0⤊ 0⤋