Self Employment

[Lexluethar]

Haha ya, this year is the only year i have a profit so far, but come February the LLC's Microsoft Partnership is due, and we'll be back at zero again.

I will do that Hef, thanks for the advice and insight. It really isn't that bad just need to get the word out and advertise

 

[Hefemeister]

I assume the link in your sig is your business?

I would make a cleaner home page. There is way too much info on the first page. I stopped reading after the first paragraph. I would put that info deeper into the site and make the home page a little more graphical with just what you do in short concise statements. Put your number right up top. If you are a Microsoft partner put that clearly on the site.

Remember if you pay someone to help you with your site that is a business expense

 

[Lexluethar]

Nah, did it myself. There are a good number of things I want to redue I just haven't had the opportunity to fix them.

Thanks for the feedback on the site, I'll definately put that we are a Microsoft Partner, i've also got a few logos I can use from MS that i'll embed in the site somewhere.

Honestly I just put it up just to be more informative then anything - once we get more traffic i'll put more effort into making the site worth while

 

[NightSurge]

Question... what would the self-employment taxes be on a sole proprietorship? I have a meeting with an accountant in a few weeks to do my 2008 return. Is sole-proprietorship taxed differently? I heard from my business adviser that it is just basically added on to your normal return somewhere.

 

[Lexluethar]

Yes it is taxed differently. A sole proprietorship treated like extra income on your return. So Surge, say you made 50k yourself, then your business made 35k, your total taxable income would be 85k. It is just an attached form you file with your individual tax return.

I THINK this is how it works, ask your accountant

 

[Hefemeister]

I will try to explain it a little better. The 3 forms in question with self employment tax are the 1040, Schedule C and Schedule SE

You start by filling out schedule c which gives you your profit or loss for the year. This amount goes on form 1040 line 12. This is added to other income ie W2 if you have any other income. This makes up your total income.

Next you fill out schedule se. Once you have calculated your profit here if you made under $102,000 you multiply it by 15.3%. This is you SE tax which is basically your social security payments and is entered on form 1040 line 57. You do get to write off 50% of the SE tax on 1040 line 27 which will reduce your AGI (adjusted gross income).

After you have your adjusted gross income you take all of your deductions ie standard deduction of $5450 for single or itemized deductions if you do that. That gives you your taxable income where you figure how much you owe for taxes.

Next you get to take any credits to reduce your tax ie child tax credit I get the foreign tax credit yeah. This gives you your tax owed. Then you add the SE tax here. Subtract out any payments you have given id withholding's or estimated quarterly tax payments. And that will give you the total owed or refund due.

I hope that explains it a bit. Take a look at the forms I put links to and hopefully it will make sense.

 

[Lexluethar]

Danke!

 

[Nagasama]

i would also suggest setting up some sort of tax account so that your taxes can be paid quarterly.

 

[Lexluethar]

Meh, i've just learned to save about half of what I earn. I pay them yearly for the company.

 

[Nagasama]

well thats a good plan too. stick it into an online savings account and get 4% on it. it adds up. quick.