I just started a home based business that will probably give me tons of deductions for my taxes this year. I also work full time at another job that takes the normal taxes for a single person (1 exemption). Is it safe to have them stop takaing out taxes from my payckeck so I can have that money available to me?
2007-05-09 06:45:02 · 9 answers · asked by ae_maldonado 1 in Business & Finance ➔ Taxes ➔ Other - Taxes
The answer depends on how many deductions you actually have for your home business. To delete your deductions from your regular pay check may cause you to owe taxes if your home biz deductions are not enough. (Early in you home biz, your deductions may not be enough to pay all your tax.)
I would leave the regular taxes as they are, complete a year with both. At the end of the year, if you owe NO TAX due to your home biz deductions, then you know you did the right thing.
If you owe taxes, then it's a good thing that you paid you job taxes as you went along. (You won't owe as much as you would have if you had deleted your deductions on your regular job)
If you get a REFUND, you will know that it is probably safe to have nothing taken out of your job income.
You should consult your tax preparer before you make a change.
2007-05-09 09:42:23 · answer #1 · answered by Pet Lover 1 · 0⤊ 0⤋
No, actually you should probably have your W-2 withholdings INCREASED unless you want to make estimated payments using Form 1040ES.
Businesses don't give you tax deductions. You may have business expenses that are deducted from the business income to arrive at net profit but if you show a loss on the business you had better be prepared to prove the actual expenses AND substantiate that you really are in business to generate income. While you can show losses for a while, the IRS won't wait forever for you to start turning a profit before they start digging deeper into your finances.
2007-05-09 10:54:24 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
NO! Those deductions you're counting on might not all be deductible for the current year - if they're startup expenses, you will probably have to capitalize some or most of them - that means the deductions are spread out over multiple years, the number of years depending on what the items are.
If you net anything from your business (and remember that not all expenses might be deductible in the current year) you'll owe self employment taxes on that, as well as income taxes.
2007-05-09 08:15:42 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
I've not heard of ISI either. My suggestion is identifying your strengths and your passions. Once you identify them then start your search looking for something that parallels your personality. If it's jewelry then look for jewelry, if it a service that provides discounts on everyday purchases then look for that, if health is important to you or those close to you then look for something in that field. Most people that aren't successful in home based businesses have chosen products or services that they're not passionate about or that it doesn't fit their personality. It's important that you check out several things regarding companies you align yourself with. Do they take advantage of people? Is their a lot of turnover in people related to the business? How good is their support? How good is their compensation plan? Are they ethical? What differentiates them from someone else? Are the products or services as good as they say they are? Do people that use the products or services have real testimonies of the benefits? Is the product or service unique? All these things should be considered. I've been involved with several different companies and have been disappointed once I've seen the business for myself. I've recently found two companies that are unique, provide great products and services, and have great compensation plans. So keep looking and ask around. If you really want to find something you will. If I can be of furher assistance let me know.
2016-04-01 04:00:20 · answer #4 · answered by ? 4 · 0⤊ 0⤋
No, no, a thousand times no. In the real world of business you should be expecting a loss for the first two years from business operations; but you might be unlucky and actually make money. Leave things as they are so you are insulated from tax shock. Worst case scenario is that you get a refund when you file for 07, live with it.
2007-05-09 11:24:49 · answer #5 · answered by acmeraven 7 · 0⤊ 0⤋
i dont recommend it, things may not sort out as planned and you may be stuck with a huge tax bill next april. i recommend waiting it out a year or two to see how your new business sorts itself out.
ps. i would LOVE to get a refund like back in the day....hasnt happened for many years!it hurts less to have it taken out gradually than cough it all up in april
2007-05-09 06:56:00 · answer #6 · answered by dali333 7 · 0⤊ 0⤋
I have my own business as well. Im no accountant, but I do know when I get paid 1099 I have to file quarterly and guess what my taxes are going to be. I dont think it matters if you have them take it out of your paycheck or not, as long as you file your quarterlies. I know there is penalties if you dont.
2007-05-09 06:54:07 · answer #7 · answered by financing_loans 6 · 1⤊ 0⤋
I wouldnt. Better to get a little refund than have to pay at the end of the year.
2007-05-09 06:53:31 · answer #8 · answered by hakker 3 · 1⤊ 0⤋
They can't do that .....you always have to have taxes taken out of your earnings
2007-05-09 06:53:55 · answer #9 · answered by shorty 6 · 0⤊ 2⤋