Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 11-14-2009, 06:34 AM
Junior Member
 
Join Date: Nov 2009
Location: USA
Posts: 3
How to fill out Self Employed Taxes?

I live in Pennsylvania, USA and I like to start a little home business. First I'm in the process of trying to figure some things out before I jump in and sell my crafts. The one thing that no one can give me an answer to is how would I go about filling out taxes for being self employed. I tried Googling though I'm not getting much of an answer, though to be honest I've never been good with searching.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 11-18-2009, 12:21 AM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,417
Blog Entries: 3
A taxpayer is required to pay 4 quarterly installments towards his or her 2009 Tax Liability. Now, your Self-Employment tax is only applicable if you will realise a profit for your trade or business in 2009.

Clearly, the question you should have is whether or not you are required to make estimated tax payments for 2009! According to the IRS, a taxpayer must pay estimated tax for 2009 if both of the following apply.

1. You expect to owe at least $1,000 in tax for 2009, after subtracting your withholding and credits.

2. You expect your withholding and credits to be less than the smaller of:
  • 90% of the tax to be shown on your 2009 tax return, or
  • 100% of the tax shown on your 2008 tax return. Your 2008 tax return must cover all 12 months.
The S/E tax is assessed at 15.3% of your net self employment income, and in addition you would be subject to your ordinary income tax rate on the same net self employment income.

The aggregate of the S/E tax liability plus your regular tax is amount that needs to be paid to the IRS on a quarterly basis according to the schedule established by the IRS as shown below;
  1. First Installment due date-April 15, 2009
  2. Second Installment due date-June 15, 2009
  3. Third Installment due date-September 15, 2009
  4. Fourth Installment due date-January 15, 2010

The estimated taxes are paid using a 1040-ES voucher, which is Form that would contain all the taxpayers pertinent tax information such as their name, address, SSN and the amount of tax payment that is mailed to the IRS. You can assess both the tax forms and instructions to complete this form by clicking on the link shown below;
http://www.irs.gov/pub/irs-pdf/f1040es.pdf

I would also suggest that you should consult your CPA to help you determine the correct amount of the projected tax liability in order to avoid any underpayment tax penalties. I am hoping that helps you in determining whether or not you are required to make an estimated tax payment and how this amount is calculated.

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply



Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Self Employed taxes howdog32 Estimated Taxes 0 04-06-2009 12:24 AM
Auto Self Employed Business Expense coordinator Auto Expenses 1 06-18-2008 12:01 PM
What is the Self-Employment Tax rate for self-employed businesses? Cooper Sole-Proprietorship 1 03-11-2008 11:37 AM
How about tips for self-employed individuals? gimini Sole-Proprietorship 1 03-14-2007 09:42 AM
Can I take a payroll from my Self Employed Business Tertard Sole-Proprietorship 1 01-24-2007 02:00 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.