KochuK
Employee Tax Expert

Get your taxes done using TurboTax

Hi JTABACK17, thank you for joining TurboTax Special Form today.

 

Congrats on starting a business in July which turned profitable in August. 

 

Assume you are a sole proprietor or a Single Member LLC, you would report your self employment income and expenses in Schedule C; hence you might consider using a spreadsheet or a bookkeeping program to record such business income and expenses.

 

Once Schedule C net profit is determined, there are other tax considerations such as qualified business income deduction, self employment tax liability (Social Security and Medicare taxes approx. 15.3%) half of which is also a deduction. All these are calculated by TurboTax software.

 

The net profit also determines the maximum amount you can contribute to a SEP-IRA, which is an adjustment to income. There is special rule for "Deduction Limit for Self-Employed Individuals." Please refer to pages 7 and Chapter 6 of IRS Pub 560 Retirement Plans for Small Business.

https://www.irs.gov/pub/irs-pdf/p560.pdf

 

I recommend that you set up a Test ID using TurboTax Online 2020 program to project the 2021 income tax outcome for both Federal and CT state.

Federal estimated tax payment - 3rd payment was due 9/15/2021, 4th payment 1/18/2022. If cash flow permits, you should make a payment as soon as possible.

Direct Pay With Bank Account

https://www.irs.gov/payments/direct-pay

Form 1040-ES 2021 Estimated Tax, vouchers on last pages

https://www.irs.gov/pub/irs-pdf/f1040es.pdf

 

CT state income tax rates range from 3% to 6.99%. Estimated payment rules are similar to that of Federal. Due dates: April 15, June 15, September 15, January 15

Form CT-1040ES tax payment coupon

https://portal.ct.gov/-/media/DRS/Forms/2021/ESForms/CT1040ES-flat0121.pdf

Page 8 of above link has instruction if you like to pay electronically.

 

Hope the above helps.

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