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laurafemia5
New Member

Started my own business and need to pay quarterly taxes. how should i go about doing this?

 
3 Replies
SweetieJean
Level 15

Started my own business and need to pay quarterly taxes. how should i go about doing this?

Carl
Level 15

Started my own business and need to pay quarterly taxes. how should i go about doing this?

If this is your first year of business and you've dealt with this stuff before, you should consult with a tax professional for at least this first year. doing things wrong can results in fines and penalties that can bankrupt your business before it even gets off the ground. After that first year, you should be fine doing taxes on your own so long as you're comfortable with it.
VolvoGirl
Level 15

Started my own business and need to pay quarterly taxes. how should i go about doing this?

In the first place you would need to upgrade from the Free Edition to prepare the quarterly estimated taxes.  So if you want to upgrade,  here is some info

For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% SE Tax on 92.35% of your net profit in addition to your regular income tax on it. So if you have other income like W2 income your extra business income might put you into a higher tax bracket.

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.)

You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

OR Go to….
Federal Taxes or Personal (H&B version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button

Or here are the blank Estimates and instructions from the IRS…..
http://www.irs.gov/pub/irs-pdf/f1040es.pdf

The 1040ES quarterly estimates for 2016 are due April 18, June 15, Sept 15 and Jan 17, 2017.  Your state will also have their own estimate forms. You mail in the estimates with a check or you can do it electronically at the IRS and maybe your state.

To pay the IRS electronically See http://www.irs.gov/uac/Electronic-Payment-Options-Home-Page  


Here is some general self employment info.  I assume you will be filing as self employed or sole proprietor, independent contractor, etc.?  If you set up an official Business with the IRS like a 1120S or C corp or 1065 Partnership/LLC then post back.  That will be a lot different and you would need to file a separate Business return.

If you have Self Employment income you have to file a schedule C in your personal 1040 return. You may get a 1099Misc for some of your income but you need  report all your income.  So you need to keep your own good records.

Here is some 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

Self Employment tax (Scheduled SE) is generated if a person has $400 or more of net profit from self-employment on Schedule C.  You pay 15.3% for 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.  You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 57.  The SE tax is in addition to your regular income tax on the net profit.

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Home & Business return....
http://quickbooks.intuit.com/self-employed
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