i run a cleaning business. how do i file my taxes?

Question

i clean for about 20 people. some pay by check some pay cash. i keep records of what i make as well.

Answer 1

More than likely you will file a schedule C on your 1040. Keep track of your income, both cash and check, from the business, as well as all your expenses for the business. If you have a profit of more than $400 you will have to pay Self-Employment (SE) tax which is 15.3% of 92.35% of your profit. This will be in addition to the regular income tax you would pay. I've attached a link to an irs publication regarding business expenses.

Answer 2

That just means more questions for you to think about:

First of all, the IRS will help!!! Yes. That is your tax dollar goes. You better use Uncle Sam to help you. And they want you to do the accounting correctly. So they can collect taxes from you.

http://www.irs.gov/businesses/small/article/0,,id=99202,00.html

A. Are you keeping the record the way that the IRS want?

Starting a Business and Keeping Records
http://www.irs.gov/pub/irs-pdf/p583.pdf

What record do I keep?
http://www.irs.gov/businesses/small/article/0,,id=98575,00.html

Bookkeeping (book-keeping or book keeping) is the recording of all financial transactions undertaken by an individual or organization. The organization may be a business, a charitable organization or even a local sports club. Bookkeeping is "keeping records of what is bought, sold, owed, and owned; what money comes in, what goes out, and what is left." A financial transaction is any event that involves money.

http://en.wikipedia.org/wiki/Bookkeeping

You need to have a professional bookkeeper. If you want to do it on your own, here are the two biggest ones:

http://quickbooks.intuit.com/index.jhtml
http://www.peachtree.com/

B. Who is doing the payroll (form 940)? Are you running the payroll taxes yourself as well? Are you using EFTPS? Who is doing payroll for your state taxes?

https://www.eftps.com/eftps/

Peachtree and Quickbooks can manage these issues.

Employers who outsource some or all of their payroll responsibilities should consider the following:

The employer is ultimately responsible for the deposit and payment of federal tax liabilities. Even though the third-party is making the deposits, the employer is the responsible party. If the third-party fails to make the federal tax payments, the IRS may assess penalties and interest on the employer’s account. The employer is liable for all taxes, penalties and interest due. The employer may also be held personally liable for certain unpaid federal taxes.

If there are any issues with an account, the IRS will contact the employer. IRS correspondence is sent to the address of record so it is strongly suggested that the address not be changed to that of the payroll service provider as it may significantly limit the employer’s ability to be timely informed of tax matters involving their business.
For the employer’s protection, the payroll service provider should be asked if they have a fiduciary bond in place. This could protect the employer in the event of default.
Employers should ask the service provider to enroll in and use EFTPS (Electronic Federal Tax Payment System), so they can confirm payments made on their behalf.EFTPS maintains a business’s payment history for 16 months and can be viewed on-line after enrollment.The IRS recommends employers verify EFTPS payments as part of their bank account reconciliation process.


C. Are you thinking about the Caterial Plan (All-You-Can-Eat for your PRE-TAX money: Medical/Dental Insurance, 401(k), Term Life, Childcare, etc.)? Do you need a financial advisor or an insurance agent for that?

D. Did you start your company as a sole proprietor (schedule C), a partnership (form 1065), a S-Corp (1120S), C-corporation(1120), or LLC? Do you know the differences between them?

Here is a good SBA web site for the differences between them:

http://www.sba.gov/smallbusinessplanner/start/chooseastructure/index.html

I always recommand at least have a tax professional to do your tax return the first time. Here are the two softwares that you may consider if you are doing the taxes on your own:

Taxcut Home & Business
http://store.taxcut.com/dr/v2/ec_Main.Entry17c?SID=1478&SP=10023&CID=0&PID=924559&PN=1&V1=924559&CUR=840&DSP=&PGRP=0&ABCODE=&CACHE_ID=0
Turbotax Home & Business
https://turbotaxweb.turbotaxonline.intuit.com/open/registration/Start.htm?productid=32&customerSource=3468337910
E. Do you have an EIN (Tax Identification Number-TIN)? Or are you giving everyone your social security number as your TIN?
*That would include filing the tax return.

Do You Need an EIN?
http://www.irs.gov/businesses/small/article/0,,id=97872,00.html

How to Apply for an EIN?
http://www.irs.gov/businesses/small/article/0,,id=97860,00.html

Answer 3

Make sure you keep accurate records of income and expenses. All of your cleaners, vacuum repairs, work clothes, paper (computer) that keeps all of your records and milege to and from the houses that you clean are all tax deductions.

Then at least your first year see a professional tax preparer that comes recommended. When my husband started his own business I shopped around for a good tax preparer and set up an appointment with him right away to make sure I was organizing things they way that he wanted it, he was able to give me more things that were now tax deductible.

Answer 4

Keep good track of your expenses and all of your income. You'll show that on a schedule C, then use a schedule SE to figure your self-employment tax (social security and medicare). The numbers from the bottom of the two schedules will transfer to a 1040 to figure your total tax.