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mrkosar
12-29-2008, 05:26 PM
Can someone please tell me how I can set up taking out income taxes out weekly, bi-weekly, or monthly (local, state, federal)? I have been just waiting until the end of the year, calculating my income, then paying all of these taxes at the end of the year. This is silly, plus is a cash flow liability. How do you guys do this?

DA Quality Lawn & YS
12-29-2008, 05:30 PM
mrk - I don't necessarily think what you have been doing is silly....

What you need to look at is your entire tax picture for your business, even including a spouse's income (if she works for someone else). Determine what you make and what is already being withheld (from spouse's job). Then go out to the IRS website and see if you need to be filing withholding annually, quarterly, etc. There are defined cutoffs to determine how you should file. All the forms you need should be on that website. For state taxes, go to your state tax website and do the same.

REMEMBER - don't start paying estimated taxes until you know for sure you have to do that. Keep your money in your pocket and earn interest off it, rather than letting Uncle Sam do the same with your hard earned dough.

jsw2008
12-29-2008, 06:00 PM
Go to an accountant and he/she will get everything taken care of for you. It will be the best money you can spend since it will save you in taxes.

turf hokie
12-29-2008, 06:09 PM
I think a lot of it has to do with size and set up of your business. I draw a small weekly salary that is taxed as though I was an employee. This way I dont have a lump at the end or quarterly worries that I have to set aside. We have a payroll comany that worries about how much and when to deposit. This is done under the guidance of my accountant who is worht his weight in gold.

RAlmaroad
12-29-2008, 06:31 PM
Go to an accountant and he/she will get everything taken care of for you. It will be the best money you can spend since it will save you in taxes.

Each state is different. Agreed, an accountant will put you on a quarterly report. He/she will fill out the IRS report with amount you pay and take out of your employee's salary. They will also compute and without the Social Security (FICA) reports and will even write the check to the IRS.
Yes, an accountant is a must when it comes to with-holding. and worth their cost by saving you a lot of headache and questions. There're professional with all of the legalese, and the end of year report and income tax report can be easily filled out since they already have the info on the computer program.

tlg
12-29-2008, 08:20 PM
maybe you should consider forming a limited liability company ( LLC) when talking to your tax guy. He and the IRS can figure your quarterly payments. The LLC incorporation will save you lots of headaches on your tax return.

Scgentlman1
12-29-2008, 08:39 PM
In South Carolina it is 36% on self employed, sounds like alot but will keep you out of trouble in the long run. Good Luck !!!!

AlpineNaturescapes
12-29-2008, 09:23 PM
If you are making about the same as the prior year, you can be fairly safe by taking the total paid, and dividing by 4. Then get the withholding forms off irs.gov, and fill out each one and send in quarterly with a check. I personally think paying an accountant to do this would cost more than any possible penalty. You should also know that there are safe harbor rules that if followed, should prevent you from having to pay any penalty.

Turfdoctor1
12-30-2008, 08:11 AM
If you are making about the same as the prior year, you can be fairly safe by taking the total paid, and dividing by 4. Then get the withholding forms off irs.gov, and fill out each one and send in quarterly with a check. I personally think paying an accountant to do this would cost more than any possible penalty. You should also know that there are safe harbor rules that if followed, should prevent you from having to pay any penalty.

As long as you pay 100% of the tax you paid in the previous year as quarterly payments in the current year, there are no penalties.

If your income increases, and you pay the same amount of tax as quarterly payments, you are just going to have a big year end payment, but there are no penalties.

I agree with DA that it is stupid that the government earns interest off our money rather than us. However, it's not really a choice. I believe estimated quarterly tax is required by law. If you have been in business for a while, just estimate that you are going to pay the same amount in 2009 as you did in 2008, divide it by four, find the forms at irs.gov, and send it in by the deadlines.

rcreech
12-30-2008, 08:30 AM
Only take cash and you don't have to worry about any of this!!! :laugh:

Just kidding, but my accountant takes care of all this for me!

If I had to worry about all the tax crap I would probably quit! It makes my head spin!!!! :dizzy:

I would rather fert and kill, and let someone that knows what they are doing worry about the rest!

My accountant charges me $400 a year and probably saves me $1000's!

It is totally worth it!

DA Quality Lawn & YS
12-30-2008, 02:49 PM
As long as you pay 100% of the tax you paid in the previous year as quarterly payments in the current year, there are no penalties.

If your income increases, and you pay the same amount of tax as quarterly payments, you are just going to have a big year end payment, but there are no penalties.

I agree with DA that it is stupid that the government earns interest off our money rather than us. However, it's not really a choice. I believe estimated quarterly tax is required by law. If you have been in business for a while, just estimate that you are going to pay the same amount in 2009 as you did in 2008, divide it by four, find the forms at irs.gov, and send it in by the deadlines.

I don't know that quarterly estimated tax payments are required by law. You have to look up the threshholds...yes, most LCO's will have to make quarterlies. If you are smaller, solo, and just starting out, think before you just mail the IRS tax payments. You may be under the threshold OR perhaps your wife/husb works for an employer and has enough tax withheld to cover your own operations. DON'T send more to the IRS in advance than you have to.