New Photography Business Tax Filing

[Aparker50]

I just started a sole proprietor business for my photography and am barely trickling in money at this point. My tax registration says I’m required to file taxes annually, being due April 15th, 2022. I understand most business pay quarterly though....do I need to do this? I don’t see anything saying to do so. Is this because Im just starting and have close to no income, or is this just something I’m assumed to know and due? 

Thanks

[VolvoGirl]

You might need to send in quarterly estimated payments if you don't have enough other tax withholding (like from W2 wages) to cover any self employment tax on a business profit.

Turbo Tax will calculate the 1040ES estimated payments

https://ttlc.intuit.com/community/tax-payments/help/can-turbotax-calculate-next-year-s-federal-estim...

You must make quarterly estimated tax payments for the current tax year if both of the following apply:

- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.

- 2. You expect your withholding and credits to be less than the smaller of:

    90% of the tax to be shown on your current year’s tax return, or

  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months).

[VolvoGirl]

I assume you will be filing this as self employment on schedule C in your personal tax return.  Or are you a Single Member LLC or a corp?

Some general info on self employment...........

You will need to keep good records.  You may get a 1099NEC at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small.  You might want to use Quicken or QuickBooks to keep track of your income and expenses.

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed  return....

http://quickbooks.intuit.com/self-employed

When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax.  You will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

Here is some IRS reading material……

IRS information on Self Employment

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Pulication 334, Tax Guide for Small Business

http://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses

http://www.irs.gov/pub/irs-pdf/p535.pdf

You pay Self Employment tax on $400 or more of net profit from self-employment in addition to any regular income tax.  You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  

[Critter-3]

The EIN confirmation page you got from the IRS telling you to file 4/15/22 ... does it also indicate what form(s)  you need to file?   Like a 940, 941, 1065, 1120?

[Aparker50]

This is the most info I see on from my tax registration file: “Based on your business open date, the first return you must file is the annual period ending 12/31/2021 and is due on April 15, 2022.”

“Filing due dates
Your taxes must be filed annually. Annual filers are required to file and pay taxes electronically (e-file).”

“You are required to file and pay electronically (RCW 82.32.080).”

I don’t see anything about form types.

[Critter-3]

Good ... then you properly indicated you were a sole proprietor/single member LLC.  

[Aparker50]

As of now it’s just a sole proprietorship, and I did this only as of a month and a half ago. I work full time as an employee at a dental office, so this is part time and completely new to me. I’m trying to figure everything out, but don’t want to make any mistakes with the irs come tax season.