Hello k_coley!
Thanks for your question. First thing to consider is to determine if your new business will have a profit, I am assuming you started the business in 2022. If you will have a profit this year, you will have to consider the taxes on the profit from your business.
The taxes on the net income will consist of:
- Federal Income tax (12% to 37%)
- Self-employment tax (15.3%)
- State income tax (paid to state if applicable)
The federal tax portion will be the marginal tax rate that applies to all your taxable income, your net business income combined with all other income earned in 2022. Here is a link to the IRS website to determine your potential marginal tax rates for 2022.
The self-employment tax portion is based on the net income from the business. Here is the IRS link that explains Self-Employment tax. It is calculated as follows:
Net Income from Business (x) 92.35% = Sub-total* (x) 15.3% = Self-employment tax on business earnings
*this calculation allows for the deduction of 50% of your SE tax
After applying the applicable federal tax rate to the income add the SE tax to get the total tax due. This is generally estimated for the entire year. This amount would be paid in quarterly to the IRS through irs.gov/payments. Here is a link to the IRS Estimated tax site.
Payments are made 4/15, 6/15, 9/15 & 1/15 the following year.
To make the payments you create an account with the IRS. Link to IRS.gov
Please ask follow up questions if you need additional information.
