How to show W4 income invested in my business

[DinettaD]

I work full time and I am a realtor part time.  I regularly put money from my full time job into my business. Where do I reflect this investment?  It currently shows up like business income, but there is no place to deduct if from my W4.

[DianeW777]

It depends.  The IRS Form W-4 is used to provide to your employer so they know how much federal tax to take from each check as a payment towards your tax when preparing your tax return. If you would like to adjust that for your self employment you are allowed to file this form with your employer as often as you need to. You can always add an additional amount to be withheld each pay period on line 4c.

I assume your realtor activity is a side business and it would be reported as self employment income.  If you are actively pursuing a realtor business for profit, then whether you have income or just expenses in the early or first year it is reported on Schedule C.

• What self employment expenses can I deduct?
• Taking Business Deductions
• How do I report income from self employment?
• IRS Guide to Business Expenses

To figure out the amount of tax on your self employment income:

1. Calculate Self-employment tax (net profit x .9235 x .153 = SE tax) for each period to see if estimated tax should be paid
2. Personal Income tax (based on the rate at which your combined taxable income from all sources falls)  
   1. Tax rates for 2024 - see page 7 of Form 1040-ES

[DinettaD]

I so appreciate your response, but I don't think I have made my question clear.  I use money from my full time job, to put into my real estate business, until it sustains itself. Let's say I put $1000 a month into my business, which would be $12000 a year.

I should be able to do something to report the $12K of my personal money that was invested into a business, that should have an affect on my adjusted gross income from my full time job.

[VolvoGirl · Accepted solution]

Are you filing your business on Schedule C?  Sorry you don't report that on your tax return.  The Schedule C is a disregarded entity.   You don't report personal deposits or withdraws.  You just pay the self employment tax on the Net Profit.   You can't deduct that from your personal income.  You deduct it by entering the actual business expenses.  

Found my good note.....

If you are a sole proprietor or self employed, you don't account for cash, money or loans you put into the business. The schedule C is all your personal income and expenses in the first place. Doesn't matter what account the money came out of. It is not income or an expense. You just enter the gross income you received and actual expenses you paid. If you paid for something you can take the expense. Doesn't matter how you paid it. You deduct the money you put in to the business by entering the expenses you used it for.

[MinhT1]

Money invested in your realtor isn't deductible. When this money is used toward expenses which are necessary for the business, these expenses are deductible.

[DinettaD]

Thank you, i finally understand!!