Self Employed Taxes

[bodeca29]

Okay My SIL is going to be starting a very small side business this year. I told her to make sure she is on top of the tax situation because it is different then when you are employed by another.

I tried looking around the irs website which is very confusing and also our state and local sites for tax info. Not much help. Does anyone know of any programs that will calculate taxes owed for any or hopefully all three?

Also according to the irs site, you only have to pay estimated taxes if you were self employed the prior year. Since she wasn't does this mean she doesn't have to do it quaterly this year or should she send it in anyway to be safe?

I hate that this is so confusing!!! I think the irs will be the easiest to figure out but state and local will be a pain.

[msomnipotent]

I have a business license and have never bought or sold anything yet. It is still confusing to me, too! I think Turbo Tax and Tax Cut have an edition that covers self employed taxes, but I haven't used them.

[edmicman]

Ah, I was just meaning to ask something like this! Does this count for "consulting" services, too? I.e., I will do the occasional web work for my previous employer as a "consultant", and he cuts me a check for the hours I worked. What am I supposed to do tax-wise on this? Like, towards the end of last year I made 80 bucks, and this year, I forsee probably no more than 500 or so? It's not like I'm making a living off of this, it's just some extra cash. But he's not paying under the table, so where can I find out more info?

[Brad]

Yes, TurboTax and TaxCut have editions that cover business stuff. It's usually the second or third "level" of their product.

If this is your first year, you most likely don't have to pay estimated taxes, but from now on you will.

Pretty much any work you do being self-employed should be reported to the IRS, even if the people don't send you a 1099 (which they should if they are using you legally and they pay you over $600) - it's still income and legally has to be reported.

[civicracinggirl7]

Are you asking about her personal income taxes, or the taxes for the business? For the business, she needs to send them back whenever she receives them, otherwise she'll receive another with a penalty fee for "late filing". So even if she hasn't sold anything, she still needs to file it and send it back before the due date.

[bodeca29]

Are you asking about her personal income taxes, or the taxes for the business? For the business, she needs to send them back whenever she receives them, otherwise she'll receive another with a penalty fee for "late filing". So even if she hasn't sold anything, she still needs to file it and send it back before the due date.

How does she figure out the amount is my question. I have been to all three sites, irs, state and local, and they make it so dang confusing. Just give me a formula mr.irs man! LOL

Turbo will figure out refunds but can they do current estimated tax.

[civicracinggirl7]

when she filed for a tax i.d. number, she should have received some papers that included county sales tax. so she needs to charge that amount of sales tax for the purchases (made in that state).

[bodeca29]

when she filed for a tax i.d. number, she should have received some papers that included county sales tax. so she needs to charge that amount of sales tax for the purchases (made in that state).


Now how would you figure it out for Independent contractors because they don't have to file for a tax id number?

[civicracinggirl7]

Now how would you figure it out for Independent contractors because they don't have to file for a tax id number?

Sorry, can't help you on that one... I have a business certificate, but it's for automotive parts retail...