Hel need advice thinking of giving up my 1 year biz because of high taxes made about 50k?

Question

Hi everyone we own a pool service biz and made about less than 50k in profits and my new accountant without reviewing everything says that we might need to pay about 9K, I was shocked since i thought the first year we didn't have to pay much since we really didn't make much, we actually refinanced our home to start the biz and now the payments are so high that we are close to foreclosure,and now he gives us that bad news, i am so dissapointed and thinking if its worth having a small biz because this year has been so tough and if we did make aournd 50k we will have to pay so much back, is this how it usually goes?

Answer 1

And to add to Bostonian, Is your accountant getting all the deductions and expenses possible to reduce your tax? Make sure! Find other ways to offset your income, you need to study and talk to other successful business people! Don't give up, where there's a will , there's a way!!

Answer 2

As a small biz owner you will pay more in taxes than on an equivalent income from W-2 wages subject to withholdings since you have to pay both halves of the Social Security and Medicare taxes.

Get out there and build your business! New small businesses typically take a time committment of 80 or more hours a week to get off the ground and become successful.

Even once you're up an running you should plan on dedicating at least 60 hours per week between operating the business and taking care of the back-end administrative scut work like bookkeeping, purchasing, payroll and taxes.

Answer 3

If you're self-employed, you pay 15.3% self-employment tax in addition to any income tax that you also owe. Actually, $9K in taxes on $50K profits sounds low.