Your sole proprietor business will enter your revenue and expenses on Schedule C and the profit on that Schedule C will flow onto your Form 1040.
I recommend the following steps to stay on top of your tax obligations:
- Set a time each month for your "Board Meeting"
For example, third Sunday of the month 4 PM to 5:30 PM
Keep track of your revenue and expenses in a file folder
The major miss for self-employed taxpayers is failure to track expenses
At the end of each month, total up your profit
If your W-2 job does not take you to the 2023 Social Security maximum of $160,200, you will owe 15.3% self employment tax on the profit
You will also owe income tax on the profit, most likely at your Marginal Tax Rate
You can locate your Marginal Tax Rate at the bottom of your 2022 Tax History Report in TurboTax
So if you are in a 12% marginal tax bracket, you add 12% plus 15.3% and deposit 27.3% of your profit in accordance with IRS "When to Pay Estimated Tax":
January 1 through March 31 period, make deposit on April 15
April 1 through May 31 period, make deposit June 15
June 1 through August 31, make deposit September 15
September 1 through December 31, make deposit January 15
