What does a new small business owner need to pay taxes ever year and what kind of things can be written off?
I just started a small business. What do I need to know about paying taxes every year? Also, what kind of things can be used as write offs?
I have no employees and am basically self-employed. Not sure if that makes a difference…
August 1st, 2010 at 2:28 pm
Your a sole proprietor which means you don’t have any employees. So you will need to file taxes the same way a contractor would. I know that business need to file FICA taxes but i’m not sure if that consists of self employed… I think they would do it differently but similar to FICA. Write offs can be items that are account recievables that you know will be uncollected. Bad debts. You need to have an allowence account. There is a lot of things you need to know. I suggest buying a book or taking an income tax class to get some knowledge. Go to a local bookkeeper or accountant to help you do your reports.
August 1st, 2010 at 2:56 pm
Ignore the info on bad debts. Chances are you will be cash based which means if someone doesn’t pay you, you just don’t show the money you didn’t get.
August 1st, 2010 at 3:51 pm
well, to start how ’bout mileage to clients, vendors, check the mail. computers and other office equipment and supplies. local taxes as they apply to your company. try and deduct from the P&L ’cause that’s the first chance you get to reduce your liability. Also, legal fees and insurance, etc…
any business related expense. be careful though, home office and business use of personal car can be areas of abuse and are considered to be red flags in time of audit.
Good luck, i’ve been self employed for over 20 years and have enjoyed it made more money than a company would pay me and helped quite a few good people along the way.
August 1st, 2010 at 4:37 pm
You are self employed or independent contractor. You must file your tax return if your self employed income is $400 or more. You will report your income and expenses on schedule C or C-EZ (Form 1040). This income is subject to SE tax at 15.3%.
Read Business Expenses: http://taxipay.blogspot.com/2008/04/tax-filing-by-self-employed-sole.html
August 1st, 2010 at 5:03 pm
WITH the economy in terrible shape, owners of small businesses could use a break. The tax code offers many to choose from, including some recent additions, and others may be on the way.
Businesses received a batch of concessions late last year, when several measures that expired in 2007 were extended to cover 2008, said Barbara Weltman, a lawyer and author of “J. K. Lasser’s Small Business Taxes.”