View Full Version : How do I get state and federal taxes taken from my business?
03-30-2003, 09:28 AM
I am a new business in my area. For four years all I did was work for another person (while I was in high school). I am going to be a teacher, so I decided to make my own business. I thought it'd give me something to do during the summer times. Anyway, I have clients lined up, I have a business account, and I even have my business account hooked up to www.paypal.com if customers wish to pay through credit card.
The only thing that I don't know about is my taxes. I have a tax ID which will be hooked up to the business account, but I am not even sure how to use it. Also, I am a sole prop. so I am not sure how I pay all the normal taxes that come out of a paycheck. I am not writing a check to myself every week, so how do I know what to pay the government? Does anyone have any easy answers for me?
I am trying to be as legitimate as possible due to my 4 year, under-the-table mishap. I couldn't get a loan to save my life!! KNOW ANYONE WHO CAN GET ME A FEW GRAND?
"Don't MOW MAD. It's BAD."
Fine Lines Lawn
03-30-2003, 10:10 AM
Don't worry about tax withholding. In fact, as a sole prop. owner, there is no way to do it. One of the most important things to do as a new business is to get hooked up with a CPA or good accountant. They can advise you on procedures and amounts for estimated tax payments, but also may advise you to wait to the end of the year for the first year. After the first year, estimated payments are easier to figure. At the end of the year, get your profit and loss, and balance sheets to them as quickly as possible so you'll know what to expect at tax time. Also, prepare a list of your equipment, including dates of purchase, price, and interest rates, so your accountant can prepare amortization and depreciation schedules. That will save you money at tax time. Set some money asside on your own but new businesses usually don't have a big tax bill for the first couple of years.
03-30-2003, 10:54 AM
Until you have employees, the tax side is fairly easy. Everything is done at the time you file your 1040. Of course, if you expect to make some profit and will owe very much tax, you may have to file and pay estimates.
Once you have employees, it becomes a whole new ball game.
03-30-2003, 12:09 PM
Ditto on a lot of what FineLines said.
I also have gone fully on my own this year, registered business name, etc.....
Met w/accountant 2 weeks ago.... he's an old friend of the family and does my father's business taxes, so I know he's good and I can trust him.... I went in with many questions written down, and some notes printed from LS to ask about.
He answered many of my questions without me even having to ask them. this was the most productive hour of my time thus far.
He told me IRS is OK with sole prop.'s not filing estimated first year on their own, as long as I have a regular salaried job also, which I do....... as stated in another reply.. after first year estimates can be more easily made.
He had many other good points / ideas for me.
Go see an accountant, keep track of every purchase, and every mile, keep a seperate checking account for business only.
Work hard, make money.:D
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