Can it be correct that I have to work 77 hours a month to cover my estimated taxes. That just seems unbelievable, I was told by my cpa to write a check for $5827. Geez whats the purpose to own my own business if I have to pay that much. Ugh!
2007-09-14 18:42:13 · 6 answers · asked by kolorz 4 in Business & Finance ➔ Taxes ➔ United States
Yeah. you can claim everything anyway, even a piece of paperclip.
2007-09-14 18:52:52 · answer #1 · answered by yahoooo! 5 · 0⤊ 0⤋
Since you are self-employed, you pay both the employer and employee halves of social security and medicare, instead of just the employee half as you would if you were an employee and your employer had to pay a matching amount to yours. The total you are looking at includes both the self-employment tax (social security and medicare) plus income tax.
Unless you are working over 40 hours a week, or didn't make the full amount of earlier quarterly payments this year, the amount sounds a bit high. At $25 an hour, 40 hours a week, your income for the year would be $52,000 if you don't have any deductible expenses. On that income, I come up with a little under $4000 a quarter for the self-employment tax plus federal income tax if you're single. Depending on where you live though, a second check for state tax could bring it up closer to the amount he indicated, and if there is also local income tax where you live, it is possible that's correct.
2007-09-15 02:29:25 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
There are many more questions before I or anyone else can give you an answer. Do you have depreciable equipment, mileage, office expenses, business property taxes, business utilities etc. As a self-employed person, you pay your own social security taxes at a higher rate than a person with an employer, as well as income taxes on your "net" income. "Net" is after all allowable expenses. Both these taxes are paid to the IRS when you file your return or through quarterly payments that are not really equal quarterly payments, but are paid 4 times a year.
2007-09-15 02:00:50 · answer #3 · answered by Carol C 2 · 0⤊ 0⤋
1. If you work for 40 hours a week, you will make $1,000 per week and maximum $52,000 per year. Then you can deduct your business expenses. Let us assume you will make $45,000 in 2007.
2. For estimated taxes, all you are required to pay is 100% of your total taxes in the year 2006. For example, if you paid $10,000 in federal taxes (including SE taxes) in the year 2006, they just pay estimated tax of $2500 per quarter. File by April 15, 2008 and you will not have any late payment penalty.
3. On $45,000 the SE tax is $6,885. Assuming you are single and don't have any dependent, then your federal income tax is $5,080. Totat of SE plus federal income tax is approx. 12,000.
Now you have enough information to find out why your CPA wants you to write a check for $5,827.
2007-09-15 02:20:28 · answer #4 · answered by MukatA 6 · 0⤊ 0⤋
Why do you think it takes months to get to Tax Freedom Day, the point where all the money you've made this year just goes to taxes.
If you don't believe your CPA, just get a tax program and put in some estimated numbers. You may be just barely in a higher tax bracket.
2007-09-15 01:51:09 · answer #5 · answered by airjarrod 7 · 0⤊ 0⤋
vote democrat if you think they will lower taxes.
2007-09-15 01:50:06 · answer #6 · answered by Anonymous · 0⤊ 1⤋